A survey of 1,541 homeowners by the National Centre for Social Research on behalf of the Department for Energy Security and Net Zero (DESNZ) revealed that by comparison, more than half of respondents felt they could trust financial advisers, banks, central government and local government, making brokers the least trusted.
Some 55% of people said they would prefer to get green finance advice from government websites, while 42% said they would prefer consumer advice services. Only a few – 7% – said they would want to receive advice from financial advisers.
A further 6% said they would trust social media for advice.
Most people were open to receiving advice about green finance, with just 21% saying they did not need advice or had no intention of using a green finance product.
Of the homeowners who did want to receive advice, most wanted guidance comparing similar green finance products, with 72% saying so, while 67% wanted to understand the terms and conditions.
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When asked about applying for green finance, 45% preferred going through government portals, the most popular choice. There was less of a difference between other options, with 27% preferring to apply through local authorities, 24% directly with installer firms and 19% through banks.
Low-interest or interest-free options preferred
The research found that homeowners are more willing to take a loan to improve the sustainability of their home if it has a low or no interest rate.
When asked to take a hypothetical loan of £10,000 for a green home improvement, the willingness to take the loan was 76% with a 0% rate. This fell to 8% with a 5% rate.
When presented with different loan options, the total loan cost was also a key consideration, and while the repayment term mattered, it was less of an influence than the cost and interest rate.
The study, which looked at homeowners’ awareness and attitudes toward green finance, found that 24% would not take out green finance under any circumstances.
Further, only 17% of people knew they could borrow additional money from their mortgage lender for green home improvements. By contrast, awareness of the different kinds of green home improvements was high, with more than half the respondents saying they knew of solar panels, insulation and draught-proofing.
Homeowners were most aware of the government’s Boiler Upgrade Scheme, but this still accounted for less than half of the respondents, with just 47% who knew of the initiative.
Cost is a major barrier to green finance uptake
For 68% of homeowners, the main barrier to making their homes greener was the upfront cost.
Almost a quarter – 23% – of homeowners were either willing or very willing to borrow money to install and generic green home improvements. This varied with the type of improvement, with 36% of people open to borrowing a loan for double- or triple-glazing windows and 35% for draught-proofing doors and windows.
Just a tenth of people would consider novel green finance products like green equity release or property-linked finance. However, when asked about the potential options, respondents were more open to green savings accounts, personal green loans and salary sacrifice.
