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Leeds BS upgrades affordability calculator to account for greener properties

  • 06/03/2023
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Leeds BS upgrades affordability calculator to account for greener properties
Leeds Building Society has upgraded its affordability calculator to account for reduced monthly outgoings for energy efficient properties.

The calculator, which is used by mortgage brokers, will account for reducing monthly bills on utilities with newer, energy efficient homes and will therefore led to increased lending allowances for mortgage applicants.

The update will offer customers improved affordability for homes built since 2020.

The society added that the change aimed to reduce the deposit hurdle for first-time buyers as customers can borrow more than they could on a less energy efficient property.

Richard Rothwell, commercial development manager for Leeds Building Society, said: “This latest innovation is part of our ongoing work to support our members in reducing their carbon footprint.

“Housing is responsible for 16 per cent of the UK’s total emissions, so it’s important as a lender that we play our part.”

He continued: “Thanks to the changes we have made, we can help more customers get the greener home they want. For example, a customer seeking a residential mortgage up to 90 per cent loan to value against a new build standard property valued at £225,000 could borrow £210,000 versus £199,000 on a non-new build property.”

Emma Harvey-Smith, programme director at the Green Finance Institute (GFI), added that it was “wonderful to see Leeds Building Society offering customers improved affordability on greener properties”.

“To successfully decarbonise the UK’s housing stock we need to encourage more and more people to live in energy efficient homes. Incentives such as preferable mortgage rates for greener homes – combined with increasing consumer awareness – will be vital to boost demand.

“Mortgage lenders and intermediaries will play a key role in educating homeowners which is why the GFI launched the broker’s handbook – a first-of-its-kind resource that provides key information on the different green home retrofit solutions and technologies available to consumers.,” she noted.

Adrian MacDiarmid from Barratt Developments said: “Building to the Future Homes standard is on the mind of every builder in the UK.

“Factoring the savings from energy efficiency into affordability assessments means that customers looking to buy a new home may be able to borrow more, making green homes even more accessible. This move by Leeds Building Society represents an important step in our journey to net zero.”

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