A quarter (25%) of landlords are prioritising energy efficiency when it comes to adding a property to their investment portfolio, new research from The Mortgage Lender (TML) has indicated.

This comes despite the Government’s rollback on energy efficiency targets for buy-to-let (BTL) properties last year, which meant landlords would not get fined if they failed to upgrade their properties.

TML’s findings, based on a survey of 1,001 BTL landlords, suggested that landlords who are considering purchasing an investment property are also prioritising monetary aspects, such as price (48%), expected rent yield (29%), and long-term investment potential (23%).

This is balanced with other aspects such as an attractive location (29%), good council tax banding (17% ), the property being move-in ready (16%), and inside layout (16%).

Head of sales – midlands, south and specialist distribution at TML, Chris Kirby, said: “It’s encouraging to see that BTL landlords are continuing to adapt and shift their priorities, even though the Government postponed the planned introduction of energy efficiency standards for properties in the private rental sector.

“It shows just how committed many landlords are to staying ahead of the curve and anticipating tenant expectations.”

The research also asked how BTL landlords will buy their next rental property. TML found that a quarter (24%) said they would buy as an individual investor with a mortgage, and a further fifth (22%) said they would buy as an individual with cash.

By contrast, 10% said they will buy their next property as a limited company with a mortgage, while 11% are planning to buy as a joint investor with a mortgage. Three out of four (77%) of landlords also said that the rate of the mortgage available was an important factor for them when buying a property with a mortgage.

Kirby added: “As lenders, we similarly want to offer greater flexibility in order to best support BTL landlords, whether this comes in the form of extending our product range or working with brokers to offer the best options for their customer base.”

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