The property landscape in the UK is evolving, with sustainability taking centre stage. A new report by Handelsbanken, the Property Investor Report 2025, sheds light on a significant shift in the market: tenants are now actively seeking properties with green features, and UK property investors are taking note.
According to the report, an impressive 92% of property investors believe that tenants are willing to pay more for homes and commercial properties with sustainable features. This growing interest comes in the form of high-demand elements like heat pumps, solar panels, and electric vehicle (EV) charging points, which are becoming increasingly important to renters. The report, based on insights from 200 large portfolio landlords and property investors across the UK, reveals that sustainability is no longer just a trend – it's a key driver of the rental market.
Richard Winder, head of sustainability at Handelsbanken, highlights how this shift presents an exciting opportunity for landlords. He explains that integrating sustainable features into properties not only appeals to high-quality tenants but can also boost rental income while lowering long-term operating costs. As regulations continue to tighten and the demand for resilient buildings grows, sustainable investments are set to increase the financial value of properties.
“Investing in sustainable features offers a rare opportunity to woo good tenants, grow revenues, and preserve tomorrow’s financial value,” says Winder. “As the market adapts, the demand for more sustainable properties will only intensify.”
The findings reveal that the market demand for green homes is far from niche. Among the key findings:
77% of landlords reported increased interest from tenants for sustainable upgrades, including heat pumps and solar panels.
57% of landlords noted tenant requests for electric vehicle (EV) charging points.
47% of landlords saw demand for properties with higher Energy Performance Certificate (EPC) ratings (C or above).
These numbers reflect the shifting tenant priorities, and landlords are beginning to recognise the value in catering to this growing demand for green homes.
Despite challenges such as geopolitical tensions, inflation, and regulatory shifts, the sentiment in the property market remains positive. The report also found:
54% of property investors plan to expand their portfolios in the next year.
80% of investors expect their portfolio values to rise despite ongoing market uncertainty.
36% of investors say proposed EPC reforms make them more optimistic about the market.
This optimism is fueled by a growing recognition that sustainable properties aren’t just good for the planet, but also business. James Sproule, UK chief economist at Handelsbanken, emphasises that sustainability is no longer a regulatory burden but a growth opportunity for property investors.
For property investors, embracing sustainability isn’t optional – it’s essential. As Sproule points out, "Sustainable properties are the edge that can make the difference. Those who adapt will thrive; those who don’t risk being left behind."
With rising tenant interest in green features and the clear business benefits they offer, property investors now have a unique opportunity to future-proof their portfolios. The demand for sustainable, energy-efficient properties is only expected to rise as both tenants and corporate clients become more conscious of their environmental impact.
As the market shifts, sustainability is becoming an increasingly important factor for tenants and investors alike. By incorporating sustainable features into properties, investors can increase tenant demand, enjoy better rental yields, and benefit from long-term capital growth. The message is clear: investing in green properties is no longer just a choice – it’s a strategic move for future-proofing your investment.
Looking to take advantage of the growing demand for sustainable properties? Contact Magnate Assets today for expert advice on how to make the most of this evolving market and explore high-return investment opportunities in the UK. Let us guide you in building a future-proof, profitable property portfolio.