The Green £: How much does it cost to save the planet?
Despite the distractions of the pandemic, Brexit and the ongoing petrol crisis, climate change is still very much on the political agenda.
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As it should be – the worst impacts of climate change could be irreversible by 2030, which goes some way to explaining why members of Insulate Britain are gluing themselves to the M25.
In 2008, the UK originally committed to an 80% reduction in greenhouse gas emissions, compared to levels recorded in 1990. However, with new research showing that the effects of climate change are worse than expected, an amendment to the act in 2019 committed the UK to ‘net zero’ by 2050.
This feels like an almost impossible task, but if we work together, even the man on the street can help the UK towards its goal – yes, even landlords.
But where can you start? And will it prove profitable?
The future is electric
If the fuel crisis has taught us anything, it’s that the future is electric. While electric car drivers sailed past the queues, traditional petrol car drivers started daydreaming about their next car – a snazzy little electric number.
But what does that mean for homes? We’ve shared before about how the fuel crisis could drive change for landlords, by creating a greater demand for electrical charging points in homes. This is something that is likely to become a much more desirable commodity over the next few years, with potential tenants looking for this in property adverts and deciding against otherwise perfectly lovely homes because they’re not able to charge their vehicle.
- Price: Around £1,000
- Potential ROI: Car leasing firm Riverdale analysed the values of 1,000 homes and found 76% with an EV charger were worth more than the local average – usually around £50,000 more
- Support: Electrical vehicle owners can apply for a Government Grant towards the cost of installation. You can also speak to the Energy Saving Trust for further support.
A clear goal
At the moment, you need a minimum rating of E on your Energy Performance Certificate, however this minimum will move up to C by 2025. So you have a little over three years to get your levels up!
It’s also worth bearing in mind that this might not be a permanent change – the goal posts may move again and go up to B or even A. So it would be worth doing as much as you can afford, rather than the bare minimum to get you into the right bracket.
Your windows are a great place to start as older windows are likely to be much less efficient than the double or triple glazed windows available today. High performance windows will mean that your tenants will waste less energy trying to heat their home – saving them money and the environment costly emissions.
- Price: £2,000-£5,000 for a typical terraced property
- Potential ROI: New windows can improve your property sale price by 10% – new buyers will be sold on the fact they won’t need to fork out to replace them themselves. Tenants will love them too, as they represent a great saving on heating bills – so this change could see you minimising void periods as your rental is snapped up quickly.
- Support: It’s worth contacting the Energy Company Obligation to see if you or your tenant can apply for financial support to change your windows. You may not qualify for support, but it doesn’t hurt to ask!
While it’s frustrating to have the roads jammed by protesters – dare we say… they do have a point (even if they may not be going about stating it in the right way)! Insulating UK homes is a great way to really help the UK on its way to that 2050 goal.
Much like with windows, proper insulation means that less energy is needed to heat the home, as none is wasted seeping through floorboards and holey roofs. This is a much larger investment than your windows, but is a long term investment and will really catch the eye of environmentally savvy tenants, looking for efficient cost-saving homes.
- Price: This varies wildly, depending on the size of your property. Terraced properties would cost around £6-8,000, thanks to the properties either side providing extra insulation. Detached properties, on the other hand, can cost around £15-20,000.
- Potential ROI: While it won’t impact the value of your property much, if at all, it will make your property more attractive to tenants and buyers, who know they will ultimately save money because the home is cheaper to run thanks to your new insulation.
- Support: Energy Company Obligation are particularly focused on improving insulation, so it’s definitely worth working with your tenant to get some support from them, as both you and your tenant will financially benefit.
The UK had set a goal of every house having a smart meter by 2020, which has been missed, but smart meters are still a great idea. They put the power in the hands of the tenants, who can see what they’re spending each day and overall and can adjust their behaviour and energy consumption accordingly.
You could also consider updating your boiler to something more efficient. As with insulation, we don’t recommend updating for updating’s sake, but it’s worth checking out how efficient the boilers in your property are and installing new ones, if necessary.
- Price: A new boiler will set you back up to £1,500. Smart meters, on the other hand, are free! They are provided and installed by the energy supplier, the cost absorbed into the energy bill, just like with a traditional meter.
- Potential ROI: Again, the potential additional value is low – boilers add about 1% to the value of your home and smart meters don’t add anything. However, value can be calculated in more than financial terms and it’s worth considering how these will improve your EPC rating and therefore the desirability (or legality!) of your property when it comes to renting or selling.
- What is the support available?: Smart meters are simple to get a hold of, it’s just a case of speaking to the energy company. The ECO is once again your go-to for boiler and other heating upgrades!
If there is a bit more bounce in your budget, it’s time to look up, at solar energy. While this isn’t currently a requirement for private landlords, who knows what the future might hold!
What are the benefits of solar energy? Well, your tenants will be delighted to see that their energy will come in part from solar energy, which will have an impact on their bills. Eco-conscious tenants (and future buyers!) will be drawn in by the promise of a smaller carbon footprint and something in their corner in the battle against ever rising electricity costs.
Solar panels aren’t right for every house, so it may be that you can’t get them, but it doesn’t hurt to do your research.
- Price: You may be surprised to hear that solar panels could be cheaper than insulating a detached house. Installing solar panels on an average home costs about £6,000. However, this is very much a nice-to-have and if you have the money, you should look into improving your insulation and windows first – as any savings the panels might bring would soon be lost through old windows and poor insulation.
- Potential ROI: Some data suggests that there could be a big impact on the value of your home, up to about 14%. Again, the biggest value is in sale and rentability.
- What is the support available?: As solar panels are a nice-to-have compared to the huge energy savings new windows and insulation provide, there are no grants to help you install them at present. However, it’s worth looking to the Feed-In Tariff, this pays you for surplus energy you produce at home (this includes energy produced by solar panels on your roof or wind turbines, if you have the land for that!). Any energy you produce and don’t use is sent on to the National Grid and results in money in your pocket. Over time, your panels could have paid for themselves, it just might take a little time, due to the Great British Weather.
Shine a light
But we’re not all made of money and as we know, all too well, landlords aren’t necessarily the financial cash cows that the public think they are. So what are some quick wins you can manage with the thin edge of your budget?
Halogen bulbs are banned as of September 2021, so if that’s what you have in your properties, now is the time to switch to efficient and eco-friendly LEDs. The ban should mean a nationwide shift to LEDs which could see a cut of around 1.26million tonnes of CO2.
- Price: Around £200
- Potential ROI: You’re unlikely to see a big impact on your bottom line, but you will at least be able to replace them, which is something you won’t be able to do if you’re currently using halogen bulbs.
- Support: None at the moment, as the cost for this change is one of the cheapest of all energy efficient savings!
Be sure to update!
If you do decide to invest some cash in making energy improvements to your properties, no matter how small they may be, make sure to update your EPC certification. Even if you’re already in band C, it’s worth updating it as the more energy efficient your home, the more desirable to potential tenants.
It’s also worth remembering that with increasingly tight deadlines on our goals there will be more and more options available from local government to support you, so as you have the time to do it, you should definitely see if there is the support available to make it easier on your pocket.
Where possible, we all need to step up and do our bit for the environment. The time we have in which to make an impact is narrowing and it’s up to us to halt our hurtle towards potential climate disaster.