Landlords have been hit by falling rental growth in recent years but there are suggestions that buy-to-let investors could supercharge their portfolio by getting on board with electric vehicles (EVs).
Many of the perks of buy-to-let have been reduced in recent years due to restrictions on mortgage interest relief and higher stamp duty charges on additional property purchases.
Lower mortgage rates in the residential market have also helped more renters get on the property ladder, while those still renting have hit a limit on how much they are willing to pay amid the cost-of-living crisis.
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This has kept rental growth low.
But there are suggestions that landlords could command higher rent by offering extra amenities such as an electric car charging point, especially with the government set to resurrect plans to ban sales of new petrol and diesel cars from 2030.
Property website Rightmove has already observed an increase in property listings that feature a car charger and the National Association of Property Buyers suggests an electric car charger can add £5,000 to a property price.
“We would encourage more landlords to start installing EV chargers at their properties, it’s a smart move to help future-proof their investment,” says Greg Wilson, chief executive of Quotezone, an insurance comparison website.
“It’s also a win-win for both renters and landlords, tenants get convenient and cost-effective charging options, while landlords are able to increase the value of their property by up to £5,000.”
He suggests it is an attractive selling point to prospective tenants.
“Providing these young EV drivers with rental options which cater to the needs of their vehicle is a great way to encourage and support efforts to reduce carbon emissions, entice new tenants, boost house price value and keep current tenants happy,” he says.
Alexandra Crocker, head of lettings at agent John D Wood & Co. in Cobham, says she has noticed more and more tenants asking about EV chargers.
She says: “We've had instances where we’ve had to install them in properties because tenants say they can't live there without one, and it's often agreed as part of the deal. It's not just limited to houses either; even new-build flats are seeing this kind of demand. It's quickly becoming an expectation.”
Can landlords charge higher rent for an electric charger?
With a large supply and demand imbalance, anything that helps a landlord stand out is beneficial to attract decent tenants and even justify higher rents.
Crocker says having an electric vehicle charger may not automatically mean a landlord can charge higher rents but it does make a property more lettable.
She adds: “It all depends on where you're based.
“In places like Surrey, for example, tenants are willing to pay more for the convenience of having a charger at home. People really value the ease of charging their car, and it's becoming something they actively look for when choosing a rental property.
“Without it, some potential tenants might rule a property out altogether. In the long run, though, I think we’re heading in that direction. As EVs become more common, having a charger could definitely become a factor that adds value and helps properties stand out."
Marc von Grundherr, director of estate agency brand Benham and Reeves, says parking has always been a hot commodity in the rental market and charging points have added a new dynamic to this.
“With electric vehicles becoming more prominent we are seeing higher demand, particularly amongst older demographics, and many tenants are placing an on-site charging point quite high up the priority list,” he says.
“During this first six months of this year, we’ve seen an approximate increase of 40% in tenant enquiries specifically stating the need for an EV charging point versus the same time period last year.”
He says this hasn’t quite translated into a rental premium as of yet though.
“Rental properties that come fit with parking already command higher market rents than those without and so currently this premium is also including the presence of an EV charging point,” he adds.
“That said, if tenant demand continues to climb, it’s only a matter of time before properties with parking and an EV charging point boats higher rental premium than properties with parking but without one."
How to add an electric car charger to your rental property
Grants for homeowners to install electric car chargers are no longer available but landlords and their tenants can still benefit.
A typical car charger costs around £1,000 to install but landlords can get an EV chargepoint grant that gives you money off the installation.
You can get either £350 or 75% off the cost to buy and install a socket, whichever amount is lower.
Each financial year, you can get up to 200 grants for residential properties.
This is only available if you are a residential landlord so it can’t be used on a holiday let or if you are living in the property.
The grant can only be used if there is a clearly defined parking space and must be installed by someone from the Office for Zero Emission Vehicles.
Some energy companies such as British Gas and Scottish Power also have tariffs that offer electric car charger installation.
Wilson adds: “Just remember to keep insurance providers up to speed with any changes or upgrades to the property – invalid or outdated information can actually void insurance policies, leaving homeowners, renters or landlords unprotected.”
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