This article explores how tenants are increasingly preferring green rental properties, explaining what this shift means and how landlords can adapt.
Tenant preferences in the UK rental market are shifting towards greener homes. With the global drive to improve sustainability across sectors and combat climate change, more UK tenants are prioritising energy-efficient homes when choosing where to live. The UK has also grappled with rising living costs and high energy bills are a significant concern for many.
As energy costs climb, environmental awareness grows and regulations tighten, the demand for green rentals with eco-friendly features is on the rise. For UK landlords, adapting to this change in tenant preferences is increasingly important, not only from an ethical perspective but also to stay competitive, reduce void periods and preserve property value.
This article explores how green rentals are growing in popularity for UK tenants, unpacking what this means for renters and landlords, what features make green homes stand out and what landlords should consider if they want to future-proof their properties.
What Are Green Homes?
Green homes or rental properties include features designed to reduce energy consumption, lower carbon emissions and generally reduce environmental impact. A sustainable home might include features such as:
- A high Energy Performance Certificate (EPC) rating: C or better
- Good insulation in the form of double or triple glazing
- Efficient heating systems, such as heat pumps or smart boilers
- Renewable energy sources, such as solar panels
- Additional green features, such as electric vehicle (EV) charging points
When a rental property incorporates several of these, it becomes what tenants and landlords would call a green rental. Green energy homes specifically emphasise sustainable power sources and low energy usage.
Tenants Drive Demand in the UK Rental Market
Recent studies show tenants are willing to pay more for green homes. According to the Handelsbanken Property Investment Report 2025:
- 92% of landlords believe tenants would pay more for sustainable, energy-efficient homes.
- 77% of landlords report increased demand for features such as solar panels, heat pumps and EV charging points.
These changes reflect a broader shift in tenant priorities. Location and property size remain important, but running costs, energy efficiency and sustainability are increasingly front and centre. UK tenants are valuing features such as high EPC ratings, renewable or low-carbon heating, well-insulated buildings and EV charging infrastructure.
Why Landlords Will Need to Adapt
As a UK landlord, upgrading your rental property is essential to meet regulations and tenant preferences. Homes that are less energy efficient may have longer void periods, as tenants lean towards green properties and skip less-efficient rentals. Additionally, as UK regulation tightens, landlords with poor EPC ratings for their properties may find themselves forced to retrofit energy-efficient features or face legal or policy consequences.
Furthermore, energy costs remain an ongoing concern for tenants, and properties with large energy bills may be unattractive to prospective tenants. By contrast, eco-conscious tenants may be willing to pay higher rents for green properties, sometimes also referred to as the ‘green premium.’ This gives landlords an opportunity to invest in sustainable upgrades and recoup some of the cost.
The Role of Regulation and Policy
Government policies on sustainability are playing a key role in the move towards green rental properties. Currently, private rentals must meet a minimum EPC E rating. Proposed changes aim to raise that to an EPC rating of C or better by 2030.
Additionally, regulations, taxes and compliance standards (for new tenancies, especially) are increasingly favouring green properties. Landlords anticipating this can act ahead by upgrading rentals now, especially as various grants and incentives are being developed or expanded in some regions to help with retrofitting and making properties more sustainable.
How Landlords Can Transition
If you are a landlord, there are several practical steps you can take to move towards offering green rentals:
- Audit your property’s current performance: Check your property’s EPC rating, insulation, heating and windows.
- Prioritise upgrades with the highest return for tenants: Consider insulation, efficient heating and perhaps also EV chargers.
- Explore financial support options: Look into grants, green finance and government incentives for upgrading your rental property.
- Market properties as green homes: Highlight energy savings and eco-features when marketing your property.
- Monitor regulations: Keeping up to date with green home regulations helps you maintain compliance and avoid last-minute costs.
Conclusion
The rise of green rentals in the UK marks an important shift in tenant preferences. For UK landlords, failing to adapt to the demand risks losing out on rent, tenant quality and long-term value. Meanwhile, the benefits of lower running costs, fewer void periods and alignment with policy make investing in green properties a smart move. For landlords seeking longevity and success in the rental market, upgrading rental properties or investing in new green homes is an important move for future-proofing your portfolio.
FAQs
Q. What are green homes?
A. Green homes are properties built or upgraded to be energy efficient, with low-carbon heating, good insulation, renewable energy systems, and features that reduce utility consumption and environmental impact.
Q. Why are green rentals becoming more popular in the UK rental market?
A. Green rentals are increasing in popularity because tenants are dealing with rising energy costs and are more environmentally conscious. Sustainability features also lower running costs and void periods for landlords.
Q. What green energy home features are most valued by tenants?
A. High EPC ratings (C or better), good insulation, efficient heating systems (such as heat pumps), solar panels and the presence of EV charging points are among the most desired features.
Q. Can landlords charge higher rents for green rental homes?
A. Yes, surveys suggest that tenants are willing to pay more for green, sustainable rental properties, though the premium size will depend on the market and the features of particular properties.
Q. Are there incentives or grants for landlords to upgrade properties to green standards?
A. Yes, there are grants and local funding schemes for upgrading insulation, installing renewables or enhancing energy efficiency. Information about the various options can be found on the UK government website.
Q. What are the risks of not investing in sustainable green properties?
A. By delaying upgrades to your property, possible risks include longer void periods, difficulty letting, regulatory non-compliance, high running costs and falling demand compared to greener alternatives.
Q. How do green rentals affect voids and tenant retention?
A. Green rentals tend to have lower void periods because tenants prefer homes with lower bills and better comfort.
Q. Will future legislation force all rentals to be green homes?
A. There are proposals to raise the minimum EPC required for private rented properties, but no final regulations have been passed. Future changes are still under consultation, with a possible target of EPC C rating by 2030.
Q. How do green properties impact property value?
A. Green properties generally maintain or increase their value better over time, particularly when compliance and energy efficiency become legal and financing requirements. Buyers often pay more for properties with good EPC ratings and eco-features.
Q. What steps should UK landlords take now?
A. Landlords should start by assessing the current energy performance of their properties, plan and budget for upgrades, take advantage of grants and remain up to date with pending regulatory changes.
Additional Sources
https://www.buyassociationgroup.com/en-gb/news/tenants-sustainability-25/
https://www.buyassociationgroup.com/en-gb/news/green-homes-rental-premium/
https://www.lettingaproperty.com/landlord/blog/epc-certificates/
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