Sustainability sells: Landlords say tenants willing to pay more for green features

Richard Winder, Head of Sustainability at Handelsbanken plc commented:

“We’ve seen landlords’ thinking mature over recent years in response to clear market signals. Investing in sustainable features offers a rare opportunity to woo good tenants, grow revenues and preserve tomorrow’s financial value, while cutting long-term operating costs. As regulations tighten and our worsening climate moves centre stage, the clamour for more sustainable and resilient buildings will only grow.”   

The report’s findings come at a time of mixed signals for the property sector. While geopolitical tensions, inflation, and regulatory shifts, like EPC reforms and the Renters’ Rights Bill, pose challenges, investor sentiment remains remarkably resilient. Other findings include:

• 54% of property investors plan to expand their portfolios over the next 12 months

• 80% expect their portfolio values to rise, despite market uncertainty

• 36% say proposed EPC reforms make them more positive about the market, while 56% see no negative impact 

This resilience is underpinned by a growing recognition that sustainability sells. The report reveals that in tenant conversations, requests for green features are no longer niche:

• 77% of landlords report tenant interest in heat pumps, solar generation, and other sustainability upgrades

• 57% say tenants are asking for EV charging points

• 47% cite demand for higher Energy Performance Certificate (EPC) ratings (C or above)

James Sproule, UK Chief Economist at Handelsbanken, commented:

“Sustainable properties aren’t just good for the planet, they’re good for business. In a market where competition is fierce and tenants have choices, going green is the edge that can make the difference. Those who adapt will thrive; those who don’t risk being left behind.” 

This shift in tenant priorities comes as many large corporates are rethinking their sustainability targets, caught between rising costs and uncertain market conditions. Yet the Handelsbanken Property Investor Report 2025 suggests that, for property investors, the opposite is true: sustainability is a growth opportunity. 

James Sproule continued: “For years, green standards were seen as a regulatory headache. But our research shows that investors increasingly see them as an opportunity to add value. The message is clear, if you’re investing in property, sustainability isn’t optional anymore, it’s essential.” 

The Handelsbanken Property Investor Report 2025 paints a picture of a sector at a crossroads. Against a backdrop of global uncertainty, the UK property market is holding steady, but the winners are those who embrace change. Landlords and investors who align with tenant demands for greener living, diversify their portfolios, and navigate regulatory shifts with confidence are the ones best positioned to thrive in the years ahead. 

Read the 2025 Handelsbanken Property Investor Report. You can also view previous reports on this link.