Speaking on an online webinar as part of the Mortgage Solutions Green Mortgage Masterclass series, Chloe Timperley, green mortgage campaign lead at the Green Finance Institute, said there were many moving parts to the retrofit conversation, both inside and outside of the financial services sector.
She added that in light of Consumer Duty’s cause of preventing foreseeable harm, advisers have “got to be able to put customers in a position to make informed choices”.
She said, therefore, knowledge of a client’s options was necessary.
An “infrastructure shift” needs to take place to help the housing sector reach net zero and transition to clean heat, Timperley continued.
“It’s a monumental challenge; brokers are going to play a key role in preparing homeowners for the shift,” she added.
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Timperley said storytelling was important to illustrate the scale of the task and let people know that doing nothing also carried a cost, as climate-related events were already impacting the global economy.
Not enough demand for green mortgages
More people were planning to make green upgrades to their homes over the next few years than previously, which Timperley said suggested while there may not be an “incredibly buoyant market” for green mortgages, there was at least a desire from consumers to make improvements to their homes.
She said demand was still low, and because there was no standard definition of a green mortgage, the sector had not yet collected quantitative data.
“But anecdotally, from lenders, we know that demand has been low, and it’s often attributed to those non-financial barriers. Some lenders have even struggled to throw free money at people to upgrade their home,” Timperley said, adding that there were “frictions in the journey” that sometimes meant people found it hard to replace something like a gas boiler with a heat pump.
“Clearly there’s… a blockage elsewhere in the value chain that finance is now tasked with going above its own finance parapet and looking to fix,” she said.
Homeowners base the decision to retrofit on the benefit of investment and their definition of a low-carbon home, so to overcome this, the sector needs to give people clearer, more positive messages and compelling stories.
Watch the full presentation below, hosted by Shekina Tuahene, deputy editor and commercial editor at Mortgage Solutions, featuring Chloe Timperley, green mortgage campaign lead at the Green Finance Institute.
