Can mortgages be properly 'sustainable'?
- Communicate the role property is playing in the UK's efforts to achieve net zero
- Explain how mortgages can be structured to promote greener living
- Explain ways retrofitting property can help bring costs down
- Communicate the role property is playing in the UK's efforts to achieve net zero
- Explain how mortgages can be structured to promote greener living
- Explain ways retrofitting property can help bring costs down
Mortgage advisers have been inundated with anxious borrowers after new deals. But here is the real 'new deal'.
Our homes use 35 per cent of all the energy in the UK and emit 20 per cent of the carbon dioxide emissions.
If the UK government is to deliver its targets of a 78 per cent emissions reduction by 2035, and net zero by 2050, household emissions need to be addressed.
It is not as if people do not borrow to improve already.
Covid and the switch to widespread flexible working will increase home energy costs still further.
Uswitch has calculated that someone working from home will use 75 per cent more gas and 25 per cent more electricity than a person who works in the office.
For some time it has been glaringly obvious that mortgage products could be a significant lever in reducing carbon emissions while keeping Britons' energy bills down.
Virtuous homes
Out there in global capital markets there are billions of pounds, dollars and euros looking for a virtuous investment home and a decent return.
The massive asset management industry has taken the whole environmental, social and governance phenomenon to its heart and marketing campaigns.
Those who manage money know that 'doing the right thing' with it has become a powerful competitive advantage.
Rather than relying on steady dividends from big oil and other planet-unfriendly sectors, those who boast strong ESG credentials are doing very nicely.
But there is a wave of greenwashing out there. Just ask the leaders at Germany's asset manager DWS – majority owner Deutsche Bank – whose offices were raided by prosecutors over allegations of misleading investors about green investments.
So why not do something virtuous and valuable with our existing housing stock? The UK has the oldest housing stock in Europe with nearly 38 per cent of its homes dating from before 1946.
Measures to make our homes more energy efficient are already with us. They are not rocket science; they are understood and eminently doable now. This is likely to make them the most energy inefficient.
The Construction Leadership Council has published key recommendations in a national retrofit strategy, which include the introduction of a mandatory minimum EPC rating of C for owner occupied homes at the point of sale by 2028.
This will have a material impact on the value and mortgageability and therefore liquidity of those homes.
Improving the housing stock
Approximately 88 per cent of the dwellings in the UK have an EPC rating of C or below, according to the CLC.
