Mortgages  

Govt’s green plans could trap borrowers and affect house prices, experts warn

The government said its approach to raising minimum standards "will work with the grain of the market", using "natural trigger points" to help minimise disruption to consumers.

It continued: “We will consider different segments of our building stock individually, helping to ensure we take a tailored pathway to improving our homes, workplaces and public spaces. 

“There is no one-size-fits-all solution to heat decarbonisation, and our approach to regulation demonstrates this.”

Immediate solution 'confusing' & 'naïve'

Yesterday, UK prime minister Boris Johnson announced a series of initiatives in line with the government's wider green strategy. One included a grant of up to £5,000 to replace gas boilers with heat pumps in around 90,000 homes across the country.

But these immediate plans are already gathering criticism.

"The rollout of heat pumps is not a viable long-term solution for the energy crisis given that most households can’t use them," said Myles Robinson, heating expert at UK boiler provider Boiler Central.

"The government is looking into using hydrogen as a suitable alternative, which is much more suited to UK homes. However, as progress is slow on getting gas grids to switch to hydrogen, the UK is pushing heat pumps as a solution when they are just a sticking plaster on a serious problem."

Robinson concluded: "Like the ‘green grants’ launched last year halfway through the Covid-19 pandemic, we can expect consumer confusion and no clear progression on what exactly will be fuelling our homes in 20 years."

Emma Cox, Shawbrook Bank's sales director, called the government's immediate plans "naïve".

"There are millions of properties across the UK that are more than a century old, some 500 years old, so this won’t simply be a case of replacing a boiler to improve its energy efficiency rating, the true cost could reach the tens of thousands," she said.

"It’s naïve to expect that every property will require the same improvements or will be affordable to landlords or homeowners.

“If we are all going to cut carbon emissions, and have a more eco-conscious economy, the government must step up to provide further incentives and support to homeowners."

Kevin Purvey, Coventry Building Society's mortgage director, agreed lenders, and especially homeowners, "need a more complete and fully coordinated plan".

“Next week’s Budget is the ideal opportunity for the chancellor to set out in more detail how everyone can prepare to do more for our environment," said Purvey. "This needs to be both cost effective and over a reasonable period of time."

Purvey believes the proposal from the Green Finance Institute to introduce an energy-adjusted Stamp Duty Land Tax "should be seriously considered" by the chancellor.