Gen H has lowered its living cost assumptions, and this change to the affordability calculation lets buyers borrow a bit more for very energy-efficient homes.
The lender said it reflected the lower energy costs typically associated with properties that have higher Energy Performance Certificate (EPC) ratings.
New-build homes are generally more energy efficient than older properties, resulting in lower monthly household energy bills.
By incorporating these expected savings into its affordability calculations, Gen H said eligible applicants purchasing new-build homes may now qualify for higher borrowing amounts than under its standard lending model.
According to the lender, the revised approach aims to better reflect the real-world cost of homeownership.
The lender noted that while the increase may appear modest, it could help buyers who are close to affordability thresholds secure a property that might otherwise be out of reach.
The move comes as lenders continue to explore ways of recognising the financial benefits of energy-efficient homes, particularly as buyers face ongoing affordability pressures and higher living costs. By taking reduced energy expenditure into account, Gen H’s updated model is designed to align lending assessments more closely with the ongoing costs associated with different types of housing.
Sara Palmer (pictured), sales and distribution director at Gen H, said: “It’s important to reward energy efficiency in housebuilding wherever we can – it’s better for people and for the planet. This tweak to our modelling rightly recognises the positive impact new-build homes can have on the monthly budget, and will help unlock doors for families right on the edge of affordability.”
