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Green low deposit mortgages will be high on the agenda – Bamford

by: Patrick Bamford, head of international business development at Qualis Credit Risk
  • 15/10/2021
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Green low deposit mortgages will be high on the agenda – Bamford
Party conference season should have left housing market stakeholders in no doubt that, in terms of priorities, getting more first-time buyers onto the housing ladder remains a key objective for this government and the opposing parties. 


While specific policy measures were short in supply, there was a general theme certainly from the Labour Party that it intends to give first-time buyers priority access to housing if it is elected, and that new-build developments in particular might be off limits to buy-to-let landlords or corporate investors. 

The Conservative Party are unlikely to go that far but it’s clear they also see first-time buyers close to the front of the queue when it comes to securing affordable, new-build housing, and there is a very good reason why stamp duty remains at zero for the vast majority of first-time buyers.

All eyes will now be on the Budget at the end of this month to see if there are any further, specific measures to support first-time buyer activity, given Michael Gove recently highlighted ‘access to finance’ as being an issue within the housing market. 

As we know, this is likely to mean access to high loan to value (LTV) finance. It has been positive to see the Deposit Unlock scheme beginning to take off, which will provide access to high LTV loans specifically for those purchasing new-build properties in certain developments. 

Nationwide recently joined this scheme and is marrying up its new-build, high LTV mortgage and green-focused lending.

Borrowers who buy a new-build through the scheme will have access to its green reward product which offers a greater level of cashback if the property purchased hits a Standard Assessment Procedure (SAP) rating of 86+, which is equivalent to an EPC rating of a high B. 

One can see this green focus being much more heavily pushed by both lenders and housing developers in the months and years to come because of the government’s carbon emissions targets. Clearly, housing stock plays a big part in this. There is encouragement to ensure new-builds meet the highest EPC ratings, for example, and that borrowers are rewarded for that with better priced products and greater levels of cashback. 

We’ve already seen a growing number of lenders offering green products in both the residential and the buy-to-let space as the industry seeks to encourage homeowners to either purchase energy efficient homes or invest in upping that efficiency.  

Let’s not underestimate how big that task is. It’s one thing to ensure all new-builds reach these standards, but it’s quite another to get that improvement among existing housing stock much of it dating back to Victorian Britain. 

However, you have to start somewhere and new-build housing is a much easier win for all concerned. By marrying up high LTV with green rewards, we can ensure that first-timers at least are able to start their home-owning journey off at the top of the EPC charts saving them money on their energy bills in the long run.

Given what is happening in the utilities sector at the moment, who wouldn’t want to achieve that? 

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