The Rise of Sustainable Housing Investments in the UK - Maximising Returns and Market Growth from 2024 - 2029

Sustainability has become more than a buzzword in 2024 – people are increasingly concerned about the effect of our actions on the planet, and the potential consequences of climate change are more visible than ever. The building and construction sector is the largest producer of greenhouse gases and is responsible for 37% of global emissions. Consumers are more educated on environmental issues and there is an increased demand for sustainability in all developments – but what does it mean in the context of housing investments? Join me as I look into the rise of sustainable housing developments and what it means for property investors.

What is Sustainable Housing?

Sustainable homes are designed to have a lower carbon footprint than traditional building methods. Sustainable housing often involves using more renewable and sustainable building materials, incorporating efficient plumbing, heating and cooling systems, smart home systems and more eco-friendly choices. As the need for housing rises along with concerns about the effect of development on the environment, it is more important than ever for developers and investors to focus on sustainability.

Key Features of Sustainable Homes

There are several popular key features of sustainable homes – an eco-friendly house can include any or all of these:

Sustainable Building Materials

Sustainable building materials conserve natural resources, reduce waste, incorporate recycled materials, and require less energy to source and create. Some popular sustainable house-building materials include hempcrete, a strong and lightweight alternative to concrete, recycled steel, glass and reclaimed wood, aerated concrete, bamboo, straw bales and cork.

Efficient Insulation

A lot of energy is wasted on heating and cooling homes, so effective insulation can cut carbon emissions significantly. Windows with improved capacity for insulation and eco-friendly, breathable loft insulation materials such as sheep’s wool and cork are sustainable ways of providing insulation.

Water Conservation

Technology and features that conserve water are a good way of reducing a home’s energy usage, from low-flow taps, toilets and shower heads to water-efficient appliances like washing machines and dishwashers, and even rainwater collection systems that can be used for watering the garden or washing the car.

Renewable Energy Sources

Homes built with renewable energy sources such as solar panels, biomass boilers and heat pumps offer sustainable energy generation that can reduce energy bills too.

Efficient Architecture and Design

The shape and layout of a home can impact its efficiency – building a home designed to retain heat or stay cool depending on the season can reduce energy usage. Smart window placement and open floor plans can help avoid heat loss and facilitate good air circulation. Nearby trees can provide shade in summer and block cold winds in winter.

Smart Technology

A smart thermostat, lighting and appliances can conserve energy by turning off automatically when they are not needed, making the home more efficient and cheaper to run.

Sustainable Housing vs Traditional Housing

While sustainable housing seems like an obvious choice, there are numerous benefits to transitional housing that we must recognise – here is a comparative analysis of both.

Cost Considerations

A sustainable home can cost more in materials – standard home-building supplies are chosen not just for tradition’s sake but for their availability and relative affordability. While sustainable building materials can save money in the long run through efficiency and their ability to command a higher sale price, the upfront costs of building a sustainable home will be higher.

Environmental Impact

The main appeal of sustainable housing is its lower environmental impact. Sustainable housing practices can reduce the carbon emissions of housing developments, which will become more important in the future due to tighter regulations, sustainability requirements, and public concerns about climate change. There will always be a place for traditional homes, especially when existing ones can be renovated to bring them in line with energy efficiency targets. Renovating an older house will almost always have a lower carbon footprint than building an entirely new one.

Long-Term Value

Sustainable homes will be in even higher demand in the future thanks to growing climate concerns and housing regulations. Some sustainable building materials may require more maintenance, which can impact long-term values, but traditional homes could face similar maintenance requirements, especially those that need modernisation.

Benefits of Investing in Sustainable Housing

Here are some of the benefits you can enjoy from investing in sustainable housing:

Higher Rental Yields

A sustainable property is very appealing to potential tenants, meaning you can expect higher rental yields.

Increased Property Value

Likewise, if you are investing in property to sell on at a higher value, sustainable houses can command a higher sale price.

Lower Operating Costs

Being able to save money on utility bills is a big draw for potential homeowners and tenants, so this could make a sustainable house even more attractive.

Reduced Carbon Footprint

Consumers want products to be as sustainable and eco-conscious as possible as they are more informed about the effects of carbon emissions and climate change, so market demand is shifting towards sustainable housing more than ever.

More Energy Efficient

No one likes the idea of living in an inefficient home – having a high EPC rating can increase market demand for your property and attract more tenants or buyers.

Market Trends and Growth – The Future of Sustainable Housing in 2024 and Beyond

Many housing developers, housing associations and councils have incorporated sustainability into their housing development plans for the next five years, highlighting a heightened public awareness and concern for the environment. The Paris Agreement in 2025 outlined the need for all greenhouse gas emissions to reach Net Zero by 2050, kickstarting a range of worldwide sustainability goals. The UK government became the first major economy in the world to legislate a zero net emissions target. All new developments in the UK must achieve Biodiversity Net Gain as of this year, and the government has plans to raise building efficiency targets and reduce energy usage on new builds and existing housing stock which would be retrofitted to meet these goals.

Recent research indicates a higher interest in new builds and a decline in interest for period properties over the past decade, and 80% of developers saw sustainable housing as more important to buyers. Consumers are looking for alternative energy sources and more efficient homes thanks to rising energy bills and the ongoing cost of living crisis. All of this will contribute to making sustainability a key market trend in the property investment market and others for 2024 and beyond.

How to Invest in Sustainable Housing in 2024

Investing in sustainable housing can mean investing in energy-efficient new builds made from sustainable materials, or retrofitting existing properties to be more energy efficient.

Here are some key considerations for investors:

Choose a location where sustainable features like solar panels will be most effective. Avoid investing in properties built near bodies of water to reduce the future risk of flooding.
Sustainable housing needs to be close to public transport, schools, shops, hospitals and other amenities to be a truly viable investment.
Some areas will have a higher environmental awareness than others – research the local demand for sustainable housing before investing.
Look for green building certifications when investing in new builds such as BREEAM (Building Research Establishment Environmental Assessment Method) which signifies best practices in green building.

Are you interested in finding out more about property investment in the UK? Join me, Liam J Ryan, and other property investment gurus at one of Assets For Life’s FREE property investment events – click here to find out more or sign up.