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Two years ago, the Government committed to make Britain carbon neutral by 2050. One of the initiatives to reach that target is aimed at reducing the country’s carbon emissions by addressing energy inefficient housing stock. According to the Government’s statistics, residential properties account for 15% of the UK’s total climate emissions.
Currently, properties being let by landlords are obliged to have at least an E rated EPC. However, the government has said it wants as many as possible to be upgraded by 2030. So, our green product range will be of benefit to landlord clients. This is whether they are buying or refinancing properties with an EPC rating of C or above. Our range may also help to incentivise more landlords to consider adding energy efficient properties to their portfolio.
As far as awareness is concerned, a survey in March found that 60% of landlords said they were interested in products that offer a lower rate for making their properties more energy efficient. Twenty years ago, that figure was only 10%. Of course, in that time overall awareness of the issue has moved from the periphery to the mainstream so the uptick in interest is hardly surprising.
Apart from the incentive of lower rates on green mortgages, landlords are recognising the growing value of owning property which not only meets today’s energy standards but also anticipates future requirements.
Last year the Government’s consultation document outlined the case for requiring new rented property to have an energy efficiency rating of band C from 2025 and 2028 for existing privately tenanted buildings. The FCA is also aligning its policy with the Government’s commitment to an eco-centred future and we will be seeing further encouragement for the wider adoption of green mortgages.
The financial and ecological argument is becoming indisputable and the intermediary channel is in the best position to be pointing out the advantages to meet today’s and tomorrow’s energy efficiency ratings.
Green mortgages provide landlords with the means to meet tomorrow’s challenges by helping to improve existing property portfolios and being more selective when investing in energy efficient housing for new purchases. Advisers have a major role to play in educating landlords that green mortgages will not only help to improve the quality of tomorrow’s rental housing stock but will also make a positive impact on their future profitability.
