Why being up to date on climate policy is more important than ever

Climate change isn’t just a global issue. It is quickly becoming a local one too. For UK property investors, environmental risks and new regulations are starting to influence where, what, and how to invest. Thinking ahead now could save a lot of money and stress later.

There are two main types of climate-related risks to consider: physical risks and transition risks.

Physical risks are the more immediate concerns such as flooding, overheating, and storm damage. Properties near rivers, coastlines, or in low-lying areas are becoming more vulnerable to flooding due to heavier rainfall and rising sea levels. Heatwaves are also more frequent, and older or poorly insulated buildings in cities can become uncomfortably hot in summer. This can reduce tenant appeal and increase running costs. In some parts of the UK, droughts are causing ground movement and subsidence, which can affect property stability.

Transition risks are linked to policy changes and shifting expectations in the market. The government is expected to raise minimum energy efficiency standards, with many anticipating that rental homes will soon need an EPC rating of C or higher. Properties that fall short may require costly upgrades in order to remain legally lettable.

Banks and tenants are also paying attention. Lenders are beginning to offer better mortgage deals for energy-efficient homes, while tenants, particularly younger renters, increasingly prefer properties that are cheaper to run and better for the environment.

So what can investors do? Start by checking the flood risk for any property before buying. Review EPC ratings and think about how easily a property could be upgraded if needed. Prioritising homes that are energy efficient and climate resilient is a smart way to protect your rental income and long-term value.

Planning for climate risks now means staying ahead of the curve, not catching up later.

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