Tenant demand for sustainable properties soars

13 June 2024

Annual sustainability investment budgets up by 20% YOY

Almost 100% of property investors surveyed by property business expert Handelsbanken have received requests from tenants for some form of sustainable feature in the past 12 months*

According to the bank’s latest annual Property Investor Report, based on exclusive insights from UK property investors with an average of 35 properties each, 95% of investors report tenants asking for sustainable features such as heat pumps, solar generation or EV chargers – with over a quarter (28%) requesting the latter.

Furthermore, three in five tenants (58%) have requested properties have an Energy Performance Certificate (EPC) rating of C, with this rising to 88% of tenants in London amid high energy costs.

"Our customers are seeing tremendous demand from tenants for sustainable properties that can help reduce both their environmental footprint and their utility bills", said Lisa Robey, Milton Keynes Branch Manager at Handelsbanken. “It’s important to note that landlords who invest in green features are not only meeting this demand, but also future-proofing their assets."

Current government regulations in England** require all residential and commercial rental properties to have an EPC rating of E or above before being let to tenants, with previous plans to raise the minimum EPC rating to C for existing residential rentals by 2028 scrapped in September of last year.

While a quarter of respondents have cut the amount they planned to invest following this announcement, a substantial proportion (44%) are continuing with their original investment plans.

With tenant appetite for sustainable properties at an all-time high, it comes as little surprise that the average value of annual budgets earmarked for sustainable investments across commercial and residential portfolios has risen from the £106,222 reported in Handelsbanken’s 2023 report, to £128,000 this year – an increase of over 20%.

The findings also show that landlords are embracing the drive for sustainable assets beyond their purse strings, and would welcome changes from the government at a legislative level: a staggering (72%) of respondents would welcome new rules raising the minimum Energy Performance Certificate (EPC) rating to A for commercial and residential lettings – the highest level achievable.

Richard Winder, UK Head of Sustainability at Handelsbanken said: “Property investors are clearly recognising the long-term value of maximising energy efficiency across their portfolios, and are eager to meet the highest sustainability standards to capitalise on the commercial benefits. Locking in value, reducing operating costs, and attracting and retaining tenants are all front of mind for investors – research suggests that assets with the highest EPC ratings enjoy considerably longer lease lengths.***”

The bank says it is also seeing an increased appetite from investors on either developing or acquiring properties with better EPC ratings based on the green financing initiatives offered by banks discounting loan margins.

Read the 2024 Handelsbanken Property Investor Report. You can also view previous reports on this link.


Media enquiries

Patrick Evans /Camilla Wyatt

Citigate Dewe Rogerson


Notes to Editors

  • *Handelsbanken commissioned research in March 2024 through independent research company Pure Profile among a panel of 200 property investors across the UK. They included 17 respondents in Wales, the East Midlands, East of England, London, North East & Cumbria, North West, Scotland, South East and the South West. There were 16 respondents from Northern Ireland, Yorkshire & The Humber and 15 from the West Midlands. The sample was broken down with 35 owning outright or with a mortgage between five and 15 properties; 35 owning outright or with a mortgage between 15 and 25; 35 owning outright or with a mortgage between 25 and 50; and 95 owning outright or with a mortgage more than 50 properties. Around 28.5% classified their business as real estate investment, while 33.5% classified their business as property management, and 38% classified their business as landlords (residential or commercial). More than half (51.5%) of the total sample owned student lettings or HMOs as part of their portfolio, while 50% owned non-student lettings or HMOs; 26% owned static park homes; 58.5% owned offices; 51.5% owned retail properties; 45% owned industrial properties; 12% owned leisure properties and 8.5% owned healthcare properties including holiday parks and hospitality. The average portfolio comprised 35 properties, with the mean individual property value across all portfolios standing at £263,900. 
  • **Rules are different in Scotland and Wales.
  • ***

Information on Handelsbanken plc

Handelsbanken is the trading name of Handelsbanken plc, which is incorporated in England and Wales with company number 11305395. Registered office: 3 Thomas More Square, London, E1W 1WY, UK. Handelsbanken plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 806852.

Handelsbanken plc is a wholly-owned subsidiary of Svenska Handelsbanken AB (publ).

Handelsbanken was established in Stockholm in 1871 and in Sweden, it is one of the country’s leading banks with a nationwide branch network. The Bank’s home markets are Sweden, Norway, the Netherlands, and the UK. It also has operations in Luxembourg and the USA.

In the UK, Handelsbanken is a relationship bank with a decentralised way of working, a strong local presence due to a nationwide network of branches, and a long-term approach to customer relations. Handelsbanken specialises in providing personalised and competitive banking services to both businesses, individuals, and property investors, and offers wealth and investment management services through its UK subsidiary Handelsbanken Wealth & Asset Management. Each Handelsbanken branch operates as a small business enabling it to make decisions at a local level and provide a bespoke service. The focus is always on the need of the individual customer and not on the sale of specific products.

For information regarding sustainability at Handelsbanken, please see here: https://www.handelsbanken.co.uk/en/about-us/sustainability