Speaking on a panel of the New Homes Mortgage Senate in Didcot, Andy Mason, head of strategic partnerships and housing at Lloyds Banking Group, said: “I think new build is perfectly positioned to lead the charge to help make affordable homes more sustainable.”
He pointed towards modern method of construction (MMC) homes, some of which have solar panels built in, which could save on energy bills.
The government has committed to become net zero by 2050 and housing is a significant contributor to overall emissions.
The government also mandated at the end of last year that new homes will have to produce around 30 per cent less carbon dioxide, using methods such as solar panels, heat pumps and better insulation.
Net zero transition a challenge
The transition to net zero could potentially be a big challenge for the mortgage market as retrofitting properties can be costly and new build properties can be expensive.
Alex Beavis, proposition director for mortgages and later life at Sesame Bankhall, added: “The uncomfortable truth and an unfortunate paradox is that green is a privilege of the affluent. If we’re going to make green more equitable, we have to find a way for green to be cheaper than non-green. At the minute, the economics don’t stack up.
“We’ve got the irony that the next generation of consumers are going be those most impacted by the poor decisions that we make around the environment. They’re also the most ethically conscious segment of consumers and yet they’re the ones who already can’t afford homeownership.”
Beavis said that in the last six years alone the population of the UK has outstripped development of new homes two to one, so every year there are twice as many new people needing homes as homes being built.
“Where are they going to live? All of the problems we talked about today around affordability, deposit etc, the answer is not just building more homes, it’s building the right homes, in the right places, at the right time, and they all need to be sustainable as well.”
Stepping away from 30,000 homes target ‘mistake’
Mason agreed that getting housing supply right was crucial, adding that “we can’t step away from 30,000 new homes a year”.
He continued: “It would be a mistake. We’ve got to start thinking a better way of helping first-time buyers into the market and developing a scheme that’s focused on the right people.
“Maybe Help to Buy wasn’t focused on the right people initially, it’s more about…designing for the people that genuinely need help to get that first step on the ladder.”
Mason added that lenders “have to do better” at building the “right products to reflect sustainability and true energy bills”.
Brokers and lenders must help strugglers
Beavis said that the strain from the cost of living crisis was now impacting different cohorts of borrowers.
He explained: “We’re getting to the point where the income threshold where you’re impacted by rising cost of living is actually quite high. Households with £40-50,000 pounds of household income, are also now feeling the pinch. Not just those we would traditionally class as on the breadline.”
Beavis said that over the past two years during the pandemic there was a “precedent set where effectively the state has stepped in to say we will back you and we’ll help you”.
“But I don’t see a mortgage equivalent coming over the hill for people who are going to struggle with mortgage payments. That challenge will come into the advice community and fall at advisers’ and lenders’ doors to help the people who are going to struggle,” he said.
Mason added that there would be even more “investment towards making sure people are okay during this period than there is already”.
He added that the bank was looking to identify people who could be struggling across its banking range and it would be “proactive” with outbound calls to see if support could be offered.
