Energy Efficiency Should Be a Top Priority for UK Expat and Foreign National Investors

With energy price rises taking hold, we explain why energy efficiency should be a primary consideration for UK Expat investors.

MANCHESTER, GREATER MANCHESTER, UK, October 5, 2022 /EINPresswire.com/ --
With the constant uncertainty surrounding the cost of energy, Liquid Expat Mortgages explain why energy efficiency should be a top priority for UK expat and foreign national investors.

Why are Energy Prices Rising?
Energy prices are rising for a number of reasons. Most notably, the Ukraine-Russia conflict has meant that the EU have restricted the amount of gas that they receive from Russia. Previously, Russian gas made up 43% of the EU’s total natural gas imports. Making this issue even worse, the demand for energy has risen dramatically as a result of a cold winter in Europe and a hot summer in Asia, which has meant people are reliant on heating and air conditioning. With a limited supply of energy, the high levels of demand are putting extreme pressure on the wholesale prices of energy, which is a cost being passed on to households.

How Are Energy Prices Affecting the Property Market?
The rise in energy bills is being felt keenly by households who are also contending with other rises in the cost of living and rising interest rates. These changes are making people more reluctant to move or buy property. Further, lenders are using the new data about increased energy prices from the Office of National Statistics when making their affordability assessments for borrowers. This has meant that many are unable to get a mortgage on their desired property as people’s borrowing potential has been drastically affected because of the lower lending limits. As a result of these changes, the rental market stays incredibly busy and competitive. But those in the rental market are also aware of the financial pressure of rising energy bills. For this reason, it’s incredibly important that UK expat and foreign national investors make energy efficiency one of their top priorities.

Energy prices were set to rise to over £3,500 in October and some estimates predicted prices to rise to over £5,000 in January – a prospect that had many terrified of falling into fuel poverty. However, the government’s latest announcement means that energy prices will be capped at an average of £2,500 a year until October 2024. Despite this announcement, the impact of rising energy prices will still be keenly felt by many, as the cost of energy is still double what it was at the start of 2022 (an average of £1,277). Further, the new cap is still higher than the price currently paid by the average household - £1,971 a year. With many households already feeling the strain of paying this amount, the price cap comes as cold comfort. The real-life amount paid will also vary dependant on how much energy each household uses – some will pay more than £2,500 and others will pay less.

How Should UK Expat and Foreign National Investors Respond?
‘Large numbers of renters are looking towards new builds with higher EPC ratings to minimise their energy costs. For this reason, energy efficient properties have been growing in popularity for a lot of UK expat and foreign national buy-to-let investors that we have spoken with. Of course, the need for UK expat and foreign national investors to have their rental properties meet the new EPC rating requirement of a C is now well documented. However, the main draw of energy efficiency at the moment is its ability to entice renters. With the energy price increases, general cost of living crisis and high inflation, decreasing energy costs is one of the simplest ways to reduce household expenses. This means that energy-efficient properties are highly desirable for renters. According to the government’s EPC data, new builds have a running cost of up to 52% less than an older property of comparable size. The Homes Builders Federation reports that occupants of new builds save an average of £629 per year compared to those in older homes. This will be drawn into even sharper relief with the new energy price increase, even with the government’s cap of an average of £2,500.’

‘Though some might think that the cap on energy prices will reduce the draw of an energy efficient property for renters, the recent economic events and evolving worldviews mean that people’s mindsets have permanently changed. In the current climate of instability, many renters are scared about the prospect of future rises or concerns for their expenses more generally. There has been a revolving door of Prime Ministers in recent years and each has their own attitude and way of dealing with economic difficulties for their citizenry. Even the current price cap is only imposed until October 2024 and who knows what could happen after that? In times of instability, people want certainty and making sure the property they live in is as energy efficient as possible is a good way to assure some relative stability. Further, mindsets have changed more generally, and many consumers are growing more conscious about their energy consumption in an effort to reduce their carbon footprints. Changing home is an excellent way to live more consciously with new properties outputting 1.4 tonnes of carbon per year, compared to 3.8 tonnes in older properties.’

‘For UK expats and foreign nationals who want to attract the highest possible number of renters – and renters of the best quality – prioritising energy efficiency will be a great move to make. UK expats and foreign nationals will make sure that their properties remain competitive in a crowded rental market, while also making sure that the property they choose remains mortgageable. Ensuring mortgageability will ensure that UK expat and foreign national investors get the best rates from their mortgage product and also maximise their profit when they eventually sell the property as a property that is easy to get a loan on will be attractive to future buyers. There are also a great range of UK expat and foreign national mortgage products available at the moment for energy efficient properties. An expert UK expat or foreign national mortgage broker will know how best to secure these deals and ensure profitability for many years to come.’

Liquid Expat Mortgages
Ground Floor, 3 Richmond Terrace,
Ewood, Blackburn
BB1 7AT
Phone: 0161 871 1216
www.liquidexpatmortgages.com

Any media enquiries please contact Ulysses Communications.
sergio@ulyssesmarketing.com
+44 161 633 5009

Sergio Pani
Ulysses
+44 7811 326463
email us here
Visit us on social media:
Facebook
Twitter