In Focus: Home ownership  

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

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.

Ross Boyd is founder of


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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.

Home heating technology mix today, in 2035 and in 2050 (Source: National Grid)

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.

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.

It is estimated 11mn properties with an EPC rating of C or less can be upgraded, the cost of which would be an average of £10,000 per property; a total cost of £110bn.

Government funding could be transitioned away from existing subsidies (estimated to be £20bn per year) that offset the cost of energy to providing financial assistance for owners to invest in improving the energy efficiency of properties.