Nine in 10 property investors are raising their spending on sustainability features, with energy efficiency now viewed as a core element of long-term asset management rather than an optional environmental commitment, according to new research from Handelsbanken.
The bank's fifth annual Property Investor Report, which surveyed 200 UK real estate investors, property management professionals and landlords, found 89% plan to spend more on energy efficiency measures across their portfolios.
The shift reflects a broader change in how the rental sector approaches sustainability, with extreme weather events, evolving regulation and falling clean technology costs all pushing investors toward a longer-term view.
EPC ratings of C or above are now the most requested sustainability feature among tenants, cited by 66% of respondents. The finding suggests energy performance has moved from a background consideration to a marker of property quality that tenants actively seek out.
That pattern continues across the rest of the data. EV charging points were cited by 50% of the panel, smart meters or smart home technology by 47%, and solar panels by 43%. Taken together, the results point to tenants looking for tangible, functional infrastructure rather than a broad green label. For landlords, the upgrades most likely to land are those that link sustainability with lower running costs, convenience and longer-term liveability.
The report also found that 68% of landlords believe renters will pay more for greener buildings, down from 92% in the previous survey. The drop may reflect a shift in expectations: sustainability features that once commanded a premium are increasingly treated as standard by discerning tenants.
"Climate change had already become a mainstream commercial consideration for property investors," said Richard Winder, head of sustainability at Handelsbanken. "But further energy price shocks, weather extremes and the tumbling cost of clean technologies have only made the case more compelling and urgent.
"Regulations will continue to tighten towards net zero, but it's market demand that's accelerating action today. Tenants are placing greater value on buildings that are efficient, comfortable and resilient. Investors are modelling how their assets will perform over the next decade or more, with the future cost and availability of insurance added into the mix. This is all driving rental and valuation outperformance for more sustainable buildings, and we expect this trend to intensify.
"For many landlords, sustainability investment is no longer just about meeting standards. It is about ensuring properties remain competitive, attractive and fit for the future."
Delayed retrofit risks becoming a false economy
The findings land as landlords face mounting pressure to improve energy efficiency, with regulatory requirements tightening and tenant expectations rising in parallel. Delaying retrofits could prove costly, with upgrades typically easier and cheaper to deliver as part of planned maintenance programmes than when rushed through ahead of regulatory deadlines. For many investors, the question is shifting from whether to invest to how best to sequence improvements across their portfolios.
Green demand reaches beyond London
Regional data from the report challenges any assumption that appetite for greener homes is concentrated in London or premium rental markets. Investors with properties in Wales (79%), Scotland (78%), the West Midlands (76%) and London (75%) are all similarly likely to report that renters will pay more for greener homes.
Demand for stronger EPC ratings is particularly pronounced among investors with properties in the North East of England (80%), the South West (79%) and London (77%). Across those regions, energy efficiency is becoming part of how tenants assess property quality, suggesting the shift is national in scope rather than confined to the capital.
