Interest in green mortgages is at an all-time high, according to new figures published by Mortgages for Business. A poll conducted on around 300 UK landlords found that 62% have an active interest in loans that incentivize borrowers to make energy-efficient improvements to their properties.
The figures contrast sharply with those of two decades ago when none of the landlords polled said that they were interested in eco-friendly mortgages for properties they purchased before the year 2000.
“Much of the UK’s housing stock is very energy inefficient, making our homes a major source of greenhouse gas emissions. Improving the energy efficiency of the UK’s stock of housing is a priority in the fight against climate change. A green mortgage means that, once they can confirm they have a revised energy rating for their property, the right lender will recalculate their mortgage rate at a discount,” commented Jeni Browne, director of Mortgages for Business.
“There are various mortgage products out there, but the best are applied upon completion of an energy efficiency project and for the lifetime of a mortgage. Given that housing accounts for such a significant chunk of the UK’s carbon emissions, it’s great that landlords are so interested in making greener choices. Spurred on, no doubt, by the fact that landlords are rushing to upgrade their properties to meet new EPC rating rules by 2028, Whatever the reasons, landlords now appear interested in joining the battle to combat climate change. That hasn’t always been the case.”
“We started trading in 1990, and the findings of our poll match our experience of the market over the last 30 years. Landlords’ attitudes have changed dramatically, particularly in the last decade. Landlords should be interested in these products, though; quite apart from the ethical considerations, green mortgages reward landlords with a lower rate when they shrink their carbon footprint.”
An unusual generational disparity
Traditionally, younger generations have been known to demonstrate greater interest in environmental issues and conservation than older demographics. In this instance, however, older landlords are more likely to seek green mortgages than younger BTL investors.
Specifically, Mortgages for Business found that, while 66% of landlords over the age of 45 were interested in green mortgages, only 50% of those in the younger age bracket were likely to apply for such loans.
Ms Browne stated that while the numbers are reassuring, major lenders need to do more to ensure greener options are available.
“Hopefully, our research will help drum up more lender supply,” Ms. Browne continued.
“The UK’s largest lenders have launched a wave of climate-change products amid criticism over their slow response to global warming.”
“For instance, one of the big lenders did launch a green mortgage last year, and we’ve seen others follow suit but have only offered borrowers preferential rates when they purchase an energy-efficient property, rather than rewarding those improving the ecological footprint of the UK’s housing stock.”
“It’s not enough, and that’s why they have failed to impress campaigners. Given Britain has just enjoyed the greenest Easter on record, with almost 80% of the energy used at lunchtime on Easter Sunday coming from zero-carbon sources such as solar and wind, the industry is in danger of falling behind the times unless we do our bit.”