Some 52% of mortgage lenders currently offer green mortgage products, analysis from Mortgage Advice Bureau shows.
Such mortgages are becoming more common, as 74% of lenders expect green mortgages to become a permanent part of their range, up from 59% a year ago.
Karina Gerdes, head of resilient homes at Mortgage Advice Bureau, said: “We all have a responsibility to push the housing market to a more sustainable future – one that is as energy efficient as possible. Green mortgage products are just one part of the puzzle, and it’s promising to see that a number of lenders share this thought.
“However, the pace of change is somewhat frustrating. Over 50% of our housing stock remains below the government’s goal of ensuring that most homes achieve an Energy Performance Certificate (EPC) rating of C or above by 2035.
“If we are to succeed in the race to net zero, collectively we need to enhance the appeal of energy efficiency. Green mortgages are one of the tools that can help us to achieve that.
“Lenders could potentially increase the penetration of green mortgages by increasing the amount that can be borrowed to improve the efficiency of a property, or by offering a lower rate or cashback.
“Meanwhile, brokers could focus their efforts on starting discussions and educating their customers about the financial benefits of retrofitting. Working together, we can transition into a more sustainable, environmentally conscious housing sector.”
Some lenders say there are more important issues than selling green mortgages.
For example, more than a third (35%) cite addressing the affordability of traditional mortgages for a broader customer base as the most pressing.
More than a quarter (26%) believe in exploring digitalisation and improving the efficiency of the mortgage application process, while almost one in five (17%) believe responding to market competition and adapting lending strategies accordingly is key.
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