Copy article

Green Mortgages

Journalist: Emma Simon, Mortgage Strategy

ended 18. September 2024

I'm looking for comment from brokers and lenders for an article on Green Mortgages - to appear in the mortgage trade press (Mortgage Strategy). As ever any comment from female brokers particularly appreciated - though I will be quoting lots of men too - so will be using those too! 

Ideally looking for comments (and they only need to be brief) by close of play Wed 18th September. 

The main questions the article will be addressing are:  
 

  1. Are  there now a good range of ‘green’ mortgage products available,  covering both mortgage for homeowners and ‘retrofit’ products, helping existing homeowners make their property more energy efficient. Is there a need for more product innovation? 
  2. How popular are 'green' mortgage with homebuyers - both in resi and BTL market? Are there any particular barriers that are stopping people opting for a green mortgage - eg are the incentives/ discounts attractive  enough for example, when compared to standard products? 
  3. Do brokers fully understand the range of product available - both for buying property and for retrofit? Could there be more support provided from lenders>
  4. Is there need for more regulation around this? eg compelling landlords to make energy efficiency changes. 
  5. What more could lenders/ intermediaries do to support homeowners when it comes to improving energy efficiency, and help UK meet net zero targets. 



Many thanks for your assistance with this. 

 

4 responses from the Newspage community

Copy all

Copy

Editor
Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
As the UK strives to meet its net-zero targets, the green mortgage market is sprouting, but it's far from a lush forest. There has been more appetite for green products in the buy-to-let market, spurred by looming energy efficiency regulations. However, many of the requirements on these preferential policies are costly and better suited to those focusing on new build developments. Consequently, this risks driving smaller players out of the market and further disincentivising individual landlords. This comes at a time when housing scarcity remains a critical issue, and the upcoming Autumn Statement could drive more landlords out of the market. For green mortgages to truly take root, we need more than just financial fertiliser, but a complete ecosystem overhaul to ensure access is possible for all.
Copy

Editor
Michelle Lawson
Director at Lawson Financial
People generally fall into a Green mortgage by accident rather than intention. A vast number of housing stock in the UK doesn't lend itself for energy efficient improvements and I am yet to have a borrower mention they want a Green mortgage specifically and to enquire what is available. The incentives from the lenders aren't really setting the world on fire either as there is usually a very minor rate differential or small cashback e.g. £250. We make landlords aware of their potential obligations however where nothing is concrete yet most are waiting for certainty before making their next move. Anyone doing refurbs are looking at these improvements though. Overall more advertising awareness and better product incentives are needed- overal I don't think people are bothered enough by it as the costs far outweigh the savings.
Copy

Editor
Simon Bridgland
Director at Charwin Private Clients
For consumers it’s a case of what is the best mortgage, or whats going to save me the most amount of money? Green mortgages are considered if they are looking at new build property or making upgrades, however the products offered simply don’t cut it when it comes to keeping cash in their pockets. They are better off getting the cheapest product rather than looking for a mortgage labelled as ‘green’. Real offers such as Halifax’s Green Living will help more. Tenants, would be better off if a property hits efficiency benchmarks, so landlords of older, less efficient homes, will feel a little pain. Landlords could swallow some of the cheaper methods of improving homes such as loft insulation or boiler upgrades. But more expensive adaptations such as double glazing, or heat pumps need a lifeline throwing to incentivise landlords. If tenants are on benefits they should be eligible for grants to have improvements done, as it would if they owned the property.
Copy

Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Green mortgages are a product looking for a borrower at the moment. I have yet to have a borrower contact me looking for any form of green mortgage. That's not to say they don't have their place, and the work being put into making them more appealing and useful is being wasted, it's just that the borrowing public currently aren't demanding this type of mortgage. They'll gladly take it if it fits with their needs and is the best fit for their needs, but if there is a lower costs non-green deal, they'll most likely take that. Until the market works out how to market green deals to consumers and generate a product that's seen as genuinely useful to borrowers, beyond a bit of extra cash back or a slightly lower rate, then the green mortgage will always be seen as a bit of a "gimmick". Some lenders are recognising this and re-looking at what they present as a green deal, so there's change still happening.