Landlords have become more interested in green mortgages as lenders launch products to incentivise improving the energy efficiency of properties.
A March survey of over 300 landlords by broker Mortgages for Business found three in five (62 per cent) were interested in products that offer a lower rate for making their properties more energy efficient.
Twenty years ago a mere one in 10 who acquired their first buy-to-let (BTL) property said they were interested in green mortgages when they made their purchase.
And before 2000 no landlord said they were interested in green mortgages, according to the broker.
Jeni Browne, director of Mortgages for Business, said the survey results matched the broker’s experience of the market over the last 30 years.
She said: “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.”
Research from the Intermediary Mortgage Lenders Association last year found three-quarters (77 per cent) of lenders had, or planned to launch, green mortgages that are cheaper or cost the same as a ‘standard’ mortgage.
Indeed, Keystone Property Finance launched a green mortgage range last week (April 13), offering a 15 basis point reduction on its core range to landlords with properties five years or older and with an EPC rating of A to C.
Nationwide’s specialist BTL arm, The Mortgage Works, also launched a green further advance range last week (April 13) to help landlords improve the energy efficiency of their properties, with two- and five-year fixed rates available at up to half that of a standard further advance.
Daniel Clinton, head of The Mortgage Works, said: “Landlords are required to ensure their properties have at least an EPC E rating, but in future this could be increased to a C rating meaning many will need to make improvements.
“By launching our green further advance with rates significantly lower than our standard range, we hope this will give landlords the push they need to start making those changes.”
In September the government launched a consultation on improving the energy performance of privately rented homes.
The consultation document outlined a ‘preferred policy scenario’ of requiring new tenancies and all tenancies to reach an energy efficiency rating of band C from 2025 and by 2028 respectively.
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