Copy article

Borrowing more to bring down energy bills

Journalist: George Nixon, The Times and The Sunday Times

ended 27. September 2022

Morning, I'm working on a story ahead of the energy price rise on Saturday about people borrowing money against their homes - either through equity release or additional mortgage borrowing - to finance energy efficiency measures to bring down their bills, by installing heat pumps, insulation, glazing. 

There seems to be some indication that this idea is proving more popular because of rising bills, and I wondered if any brokers or advisers were seeing more clients bring this up as something they wanted to do? Any recent examples of this happening? This is more for standard residential borrowers than landlords, by the way. 

Thanks, all the best,

George

7 responses from the Newspage community

Copy all

Copy

Editor
Manooch Suree
Director at Zinga Financial Services
Yes, we have had clients enquire about various ways they can raise funds from their existing properties to fund installation of energy efficient improvements. People are looking for long term ways of savings costs on their energy bills and now comfortable investing a lump sum upfront to fund these measures. One of our clients raised funds on their existing house to install solar panels and insulation of their house. Clients have also seen a rise is ''Green Products' offered by banks for properties that are energy efficient and feel that they in the long not only will save on their energy bills but can also qualify for better mortgage deals goign forward,
Copy

Editor
Scott Gallacher
Director at Rowley Turton
Before the recent energy price rises, it was tough to make a case for Solar Panels for most people. However, more recently, we have had several clients looking at this. However, I think you also need a separate battery to get the maths to work. This enables you to store any unused solar energy for yourself rather than selling it back to the grid at a lower rate. So far, one client has used Equity Release to fund Solar Panels to reduce their money outgoings. And another is looking to withdraw money from their savings and investments for the same reason. However, the recent price cap may make people think twice about Solar Panels because there is now less incentive to get them.
Copy

Editor
Mike Staton
Director at Staton Mortgages
I have always been against raising capital for energy improvement measures, this is purely because the saving in the area i live in just didnt warrant the outlay to do it. These times are starting to change, but with increased demand will come increased costs, i think their is a small window to get this done now before it once again becomes uneconomical to do.
Copy

Editor
Rob Peters
Principal at Simple Fast Mortgage
Borrowing money for home improvements is nothing new, but rising energy prices have made more people consider investing in alternative energy systems for their homes. Solar and heat pump technology is amongst the most popular, and whilst these systems are not cheap to install, the time needed to recoup the initial cost has vastly reduced. Online research indicates that the once 15 year timeframe has reduced to 6 years in some areas. This offers great value for money for thos looking to become egenergy self-sufficient.
Copy

Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
We are seeing this trend increase and think it’s sensible. I have just submitted a lifetime mortgage application for a couple to install solar panels and a battery on their 4 bed detached house. This will cost £18,000 but will have paid back that investment in less than 6 years after the energy price rise.
Copy

Jonathan Burridge
Founding Adviser at We Are Money
I have just started a course in Retrofitting qualifications not advise but to be informed and knowledgeable, because I see this as being a growth market. I had a client quoted £10K for solar and batteries and £15K for Ground source heating and he didnt invest in either because of the outlay in the costs. We are looking at funding options so that homeowners will see the longer term benefits and not just gulp at the initial cost. This is green action that we should be supporting, not offering £500 cashback or a 0.10% lower fixed because of an EPC certificate. As the net zero emission target draws closer the Government will need to offer more financial incentives, until then we will be building a solution for our clients.
Copy

Dominik Lipnicki
Director at Your Mortgage Decisions Ltd
Not surpsisingly, more and more home owners are looking at ways to become as energy efficient as possible. The cost of living crisis and in particular, the increase in energy prices have focused minds. Big energy efficiency projects still need to be carefuly costed as they can take many years to repay, especially once borrowing costs are considered.