With sea levels rising and cities being gradually choked by vehicle and building emissions, the ‘green issue’ is becoming an increasingly important consideration for many consumers. One person can make all the difference they say, but do we really believe them? And what does this have to do with the residential property investment market and mortgage brokers? Quite a bit is the simple answer.
Research undertaken by the Financial Times suggests about a quarter of green house emissions come directly from our homes. This fact is well known by the growing ‘green lobby’ and consumers are increasingly choosing to make their properties more environmentally friendly. Landlords are also jumping on the bandwagon, as seeking unique selling points (USPs) for their properties – in the current competitive market – they consider renovating to improve their green rating.
Admittedly it is something of an onerous task faced by landlords, and undoubtedly there will be a financial burden to be shouldered, but it is ultimately worth it. Housing Minister, Yvette Cooper, recently announced plans to raise the council tax payable on those properties that are the least energy efficient while offering a rebate for those which are the greenest.
Conservative leader, David Cameron has garnered extensive media coverage for his choice of home improvements. One of these includes a wind turbine on his roof as well as solar panels. A lot of consternation about his ambitious plans is due to the fact that his soon to be palatial home is in a conservation area. I know, somewhat ironic that measures to help protect the planet could cause uproar as they might offend the sensibilities contained within a leafy suburb. But surely these plans are to keep the leaves on the trees and stop them from being destroyed by acid rain.
Improvements
Improvements that landlords can make to their property are both varied and effective. A first example of this is for those landlords whose properties have garden space. By simply changing the plants which are kept in the garden to those most suited to the local environment should reduce the need for excessive watering, thus reducing water bills and increasing efficiency. How useful this would have been over our somewhat arid Summer.
Another is an old one, but like the bicycle, good ideas do maintain certain longevity. Insulation – and plenty of it – will help to reduce the rate of heat transference from inside the property to outside, reducing the cost of heating and offering savings which are a real USP to any tenant.
Often seen as something of a luxury, especially on the myriad of design programmes which clog up our television channels, under-floor heating could be the answer to efficiency problems. Pipes beneath the floor will heat upwards but into the middle of the room and be evenly distributed. This is a huge contrast to the way conventional wall mounted radiators allow heat to travel up the walls and be dispersed at ceiling level and out of the window.
A running theme
There is a theme here, and it is one of initial outlay, but also one of long-term rewards. The boom in organic produce and a disenchantment with global industrialism has left many thinking to their futures, and that of their children, and what better way than to begin at home. Of course we can help by not leaving the television on standby, and pulling the curtains while making sure the dog lies across the gap beneath the door. But it is not enough anymore.
If the lesson of supermarket organic ranges has taught us anything it is that there is a market for it, and residential property investors who embrace this will be at the cutting edge of this when the green renters come knocking.
Most UK properties are not green-friendly in terms of the measures mentioned above, and as such any landlord will need a surplus to get his house compliant. Mortgage intermediaries advising their clients on this issue should make them aware of the need for a significant cash reserve in order to complete such improvements.
If Yvette Cooper has her way then those who have hit the ground running will be in a prime position to take advantage and reap any benefits, such as perhaps increased rental yields. If thinking long-term, investors could have all the ingredients of a profitable investment proposition.
Written by Lee Grandin (Landlord Mortgages)
