The UK property market is witnessing a surge in interest in new-build properties among investors, driven by a combination of tenant demand, regulatory changes and an increase in financial incentives for energy-efficient properties. Buy-to-Let mortgage lending is predicted to have ramped up by 14% by the end of this year according to research from the Intermediary Mortgage Lenders Association (IMLA), with a further 11% boost in lending expected over the course of 2026.
This trend reflects a broader shift toward sustainable and energy-efficient investments, offering both immediate and long-term benefits for landlords and the wider economy.
New builds, with their modern designs and high energy performance, are becoming a cornerstone of strategic property portfolios, aligning with evolving market dynamics and government policies, such as the Future Homes Standard (FHS).
A key driver of this trend is the strong rental demand for new-build properties, particularly in vibrant city centres. These properties often feature amenities like gyms, co-working spaces, and green areas, appealing to younger tenants seeking a modern, community-focused lifestyle. Their high Energy Performance Certificate (EPC) ratings, which are typically A, B, or C, make them particularly attractive, as they meet the UK government’s push for energy efficiency.
With regulations requiring rental properties to achieve a minimum EPC rating of C by 2030, new builds offer landlords peace of mind, as their ratings are valid for a decade, well beyond the deadline. This forward-thinking approach reduces the need for costly retrofitting, unlike older properties that may require significant upgrades to comply.
Financial incentives further bolster the appeal of new builds. Lenders are increasingly offering 'green' mortgage products, such as reduced arrangement fees or cashback for properties with high EPC ratings. For instance, some buy-to-let lenders provide up to £1,000 cashback for properties achieving A-C ratings within a mortgage term.
These incentives not only lower upfront costs but also enhance the potential for the long-term value of energy-efficient properties, as tenants are willing to pay a premium for homes with lower utility bills. A 2025 report highlighted that 92% of investors noted tenants’ willingness to pay more for sustainable homes, with demand surging for features like heat pumps and solar panels.
Beyond tenant appeal and regulatory compliance, new builds contribute to broader economic benefits. Increased investor interest supports developers, aligning with the government’s goal of building 300,000 new homes annually. This activity stimulates construction, creates jobs, and facilitates the development of social housing.
Additionally, the focus on new builds could ease pressure on the second-hand property market, making it more accessible for first-time buyers and home movers, thus improving overall market fluidity.
Investors are also drawn to the diversification opportunities new builds offer. By investing in off-plan developments or properties in emerging areas such as brownfield sites, they can secure assets at discounted rates before they hit the open market.
Locations near tech hubs or improved transport links, such as those in London’s green belt or Manchester’s regenerating areas, are particularly appealing due to their potential for capital growth and rental yield. However, investors must remain cautious, as high construction targets could risk oversupply in some regions, though demand in high-scarcity areas like London remains robust.
At e.surv, we believe the growing popularity of new builds among property investors reflects a strategic response to tenant preferences, regulatory pressures, and economic incentives. By prioritizing energy-efficient properties, investors not only future-proof their portfolios but also contribute to a more sustainable and dynamic UK property market.
