How Eco-Friendly Property Is Changing the UK Market
- Eco-friendly property is an example of quality in a competitive market
- 73% of millennials are willing to pay extra for sustainable products
- Key elements for an eco-friendly property generally include glazing, renewable energy, eco-friendly materials
There’s no doubt that the current generation of renters is more environmentally-aware than ever before. Sustainability is a huge buzz word that is impacting broad strokes of our day-to-day life and property is no different.
The rise of the ‘eco-home’ is a concept that has taken hold in the UK, changing developers perception of the wider market. Sometimes referred to as ‘environmentally sensitive’, ‘sustainable’ or ‘green homes’, these eco-friendly developments are designed and built in a completely different way to your traditional property. Often prioritising eco-friendly materials and renewable energy over traditional measures, these properties are environmentally-friendly without compromising on quality.
Researchers in Switzerland are already strategising life without fossil fuels as sustainability grows in importance, building a roadmap to a completely renewable lifestyle. In a thought experiment measuring actual consumption and alternative solutions, the study found that by utilising geothermal energy and hydropower, Switzerland could shrink the coverage gap in seasons where solar power is less available.
So, how is the UK property market looking to emulate Switzerland and adopt a concept of sustainability in the industry? Below, we’ll identify what makes a property eco-friendly before examining the developments already making strides in the sector.
What Makes a Property Eco-Friendly?
Fundamentally, an eco-house will minimise environmental impact at every touchpoint – such as the energy it uses and the effect it has on the local ecology. From the locally sourced, green materials they incorporate to the design features that reduce emissions and lower the overall carbon footprint, eco-friendly properties are not just socially-conscious but practical in reducing outgoing bills.
Eco-homes can also create a healthier internal space and facilitate a sustainable way of living for a generation more aware of environmental issues. Key elements for an eco-friendly property generally include quality insulation, high levels of ‘airtightness’, double or triple-glazed windows, passive solar facilities, renewable heating, electricity from a ‘green’ provider, natural materials and rainwater harvesting.
Energy efficiency is usually the prime reason for choosing an eco-friendly home, especially when low-running costs are taken into account. While many people will initially consider heating as a major aspect of energy efficiency, it’s also important to consider hot water and electricity consumption.
From a different perspective, developers are also creating environmentally-friendly properties through the facilities they’re providing. With developments such as The Grand Exchange in Bracknell providing co-working spaces and on-site gyms, they can indirectly help residents lower their carbon footprint by removing the need for lengthy commutes.
The Grand Exchange also includes traditional energy-saving factors such as efficient appliances, solar panels to provide renewable energy for the development and electric-car charging points that encourage a more sustainable lifestyle for each aspect of day-to-day life.
Benefits of an Eco-Friendly Property
According to research by Nielsen, 73% of millennials (they attribute the term to those born between 1977 and 1995) are more willing to pay extra for sustainable products. Despite the difficult economic climate, almost three-out-of-four of 30,000 millennial consumers around the world are paying more for cruelty-free, sustainable or organic items.
Rishabh Chokhani, CEO of Naturevibe Botanicals, believes that consumers don’t want to ‘buy a product’: “People want to feel that whatever they are buying aligns with their personal values. That’s why we’re seeing a shift towards sustainable farming, farm-to-table and organic botanical ingredients.”
This isn’t just for groceries either, the same theory applies to property. It would be beneficial for property investors and Buy-to-Let landlords to consider the power that sustainable developments could have in a mature, competitive market.
Aside from being a selling point, energy-efficient properties can attract tenants seeking affordability. While it’s likely that investors won’t be making wholesale changes to the structure of a building, finding a property that offers glazing, proper insulation and draft-proofing can take advantage of the change in culture to ‘quality over cost’.
Choosing Quality Over Cost
Longevity is key to building success in investment. The longer an investment has to build consistent returns, the better. Buy-to-Let (BTL) property is no different – long-term strategies will always overperform against short-term ‘flipping’.
The Buy-to-Let market is also mature, which means it is relatively competitive with a broad range of properties and locations ready to be invested in. While investors will generally choose the lower cost option in an attempt to find value, there’s actually more value in choosing quality over cost, as this development will attract premium tenants over a longer period of time.
As mentioned above, an eco-property is just one example of quality in a saturated market. It’s these types of property that will ‘stand-out’, attracting quality tenants and overperforming in the market due to natural growth.
With demand so high and supply so low in many regional cores, it’s also vital for investors to find a niche that fits their investment strategy. If you’re targeting a younger professional demographic for example, finding out what millennial renters prioritise (such as eco-properties) is ideal. Apply this to a prime location planning future growth (a fundamental BTL tactic) and you have the foundations of a strong investment.
For investors, the growing popularity of environmental awareness is a trend that can and should be harnessed to increase returns. By identifying developments such as The Grand Exchange that provide more sustainable alternatives, developers can maximise returns in a competitive market.