In an industry first, a green mortgage handbook has been launched for mortgage brokers and intermediaries, designed by a collaborating group of industry experts.
The handbook aims to advise and educate mortgage intermediaries on the retrofitting technologies and opportunities available for their clients.
Led by the Green Finance Institute, the handbook has been made in partnership with:
- the Association of Mortgage Intermediaries
- the Building Societies Association
- the Energy Saving Trust, the Equity Release Council
- the Intermediary Mortgage Lenders Association
- UK Finance
- L&G Mortgage Club in association with cross-industry partnership Mortgage Climate Action Group.
Improving a home from an F to a C EPC rating could add an additional 16 per cent to its valueThe handbook is designed to be a reference point for mortgage brokers on what is an “unfamiliar topic for most”, that AMI has said is “compounded by a lack of clarity from government on what the future of the net zero agenda holds for the mortgage sector.”
A spokesperson for AMI told FTAdviser: “This is about giving brokers the tools and information to start an education journey on green home finance, to help them understand more about the issues and options available.
"We don’t see it as the role of the mortgage broker to recommend specific green technologies or solutions, and we’re a long way off from having any kind of system of referrals to third party technology providers in place.
"But as the market develops, brokers will start to be involved in advising on the financial solutions. Hence why we are encouraging brokers to begin learning and preparing now – starting with the Broker Handbook.”
Built environment director at the Green Finance Institute, Emma Harvey-Smith noted that rising prices are causing “widespread concerns for both domestic and commercial energy consumers.”
“Mortgage brokers are a key part of the puzzle when it comes to facilitating better insulated homes that cost less to heat, and support a net zero future,” she said.
Harvey-Smith also explained there is consumer interest for more financial products being offered on green solutions, in part due to soaring energy bills.
“The Rightmove Green Homes Report found that improving a home from an F to a C EPC rating could add an additional 16 per cent to its value. Meanwhile, the same report found that 89 per cent of homeowners are looking to make green improvements in order to save money on energy bills.
“Now is the time to act, and the fledgling green mortgage market will go some way to benefit consumers seeking finance,” she said.
The recently announced Net Zero Review included targets for all homes sold in the UK to be a minimum of EPC C by 2033.
“Finance is essential in making this change,” the Green Finance Institute has said.
Mortgage advisers can’t afford to be left behind Robert Sinclair, AMIIt pointed to the findings of the government’s independent advisory body on climate change which estimates a total investment of £360bn will be needed to bring UK housing stock up to standard by 2050.
Commenting on the initiative, AMI chief executive, Robert Sinclair said: “This isn’t about advisers becoming retrofitting experts or energy consultants – we don’t expect mortgage intermediaries to start advising on heat pumps and solar panels. But we do need them to be aware of the solutions, because it’s not going away and our customers will need help.”
Increasing energy bills and the impacts of climate change are becoming priority concerns for homeowners and the mortgage industry has been moving at pace to try and keep up.
The number of green mortgages available on the market has been growing significantly, increasing from just three in 2017 to 51 in September last year.
“As temperatures and sea levels rise, more consumers are going to want reliable, high-quality information on reducing their carbon footprint,” Sinclair said.
“Mortgage intermediaries have a unique opportunity to be at the heart of the conversation, and alert consumers to the various aspects of home energy efficiency they may need to consider.”
Sinclair likened the need for adaptation among mortgage brokers to when those who advised on buy-to-let began talking to clients about using limited liability company solutions “without becoming tax advisers”.
“We adapted then, it’s time to adapt now. It may not seem like a priority today, but this will grow quickly. Mortgage advisers can’t afford to be left behind,” he said.
jane.matthews@ft.com
