We previously discussed the potential options for lenders to do more than ‘greenwashing’ their product ranges and criteria, with regards to incentivising homeowners to make the energy efficiency improvements that, at some point in the future and probably not too far away, are going to become mandatory.
At the moment, it is landlords of course being asked to lead the charge towards higher EPC levels, but it seems fairly obvious that all properties will be required to move in the same direction in the years ahead.
The anticipation is that, by the end of the decade, the government wants EPC level C to be the bare minimum for all UK properties and, given the nature of a lot of our housing in this country, that is going to take a fair amount of work on behalf of owners and, by extension, a fair amount of money.
Stamp duty incentive
We suggested how lenders could bake-in cashback into their mortgage products to help support borrowers to carry out the work, and it has been interesting to see a stamp duty-related ‘solution’ provided recently by the Energy Efficiency Infrastructure Group (EEIG).
This would essentially involve stamp duty savings on the purchase of higher EPC homes, and conversely those at the lower end of the scale would incur higher charges. With the incentive being that anyone carrying out the work within a certain timescale to improve the EPC level would be able to claim a rebate on the extra stamp duty costs.
The problem still remains, however, that the average cost to get a property from E to C, for example, is going to be more than the rebate in most cases. However add in further incentives from lenders and, dare we say it, government, and you might be able to get more people invested in carrying it out.
Plus, of course, if there is a deadline for your property to have reached EPC level C, and you need to carry out the work necessary, then you may as well take advantage of all the incentives you can get, at the time they are available.
Now, of course, this screams ‘vested interest’ in so many ways. It will be the members of the EEIG who are building the new homes, carrying out the work and so forth, but that doesn’t necessarily make it a bad idea.
How it works elsewhere
In France, for example, this type of carrot and stick approach has been going on for some time. All those programmes on TV involving Brits buying run-down chateaus tend to omit the fact that if the owners don’t get these properties up to standard in terms of roofing, insulation or energy efficiency within a very short space of time, then the owners get fined for their trouble.
It is a policy designed to weed out those who like the idea of turning a run-down shell of a building into a going concern but are not willing to truly commit to doing it within a set timescale.
In Finland, the government insists on homeowners upgrading their double-glazing and boilers every few years. It’s not an option, it has to be done, and the homeowner receives the bill.
The reason is of course ‘green’ related, but also the fact that in a place so cold, if you’re heating goes on the blink during the night, the occupants of the home could die in their sleep. Which makes you think.
The point is that not only are we all going to have to do our bit, but it’s likely that no one scheme or incentive is going to get us to where we need to be.
Perhaps the government needs to follow its European counterparts and get more bullish – we need to stop flying by the seat of our pants and become more serious about improving and maintaining the quality of our housing stock.
Personal and corporate responsibility is a start, and should be actively encouraged, but when it comes to housing – given the vast majority of properties that exist in this country – then all parties are going to have to come up with their own approach to get owners engaged, aware and undertaking the work required.
The clock is ticking. It has been for some time.
