The initiative has taken place through the government’s Green Home Finance Accelerator, which awards companies with funding to develop and test projects which improve energy efficiency.
Some 26 projects will gain funding amounting to £4.1m in total.
This includes Perenna Bank, which will receive £193,350 to develop its long-term fixed rate mortgage which will encourage homeowners to improve the sustainability of their homes and lower their mortgage rate over time.
Ashman Bank will be awarded £200,000 to design and develop a product to help buy-to-let landlords add renovation costs to their mortgage, which will allow them to borrow money to upgrade their properties and repay the loan within their mortgage.
This product will assess a property’s energy efficiency and suggest options on how it can be improved. The cost of any work will be incorporated into the duration of the mortgage.
Virgin Money will be awarded £171,000 for a product which will offer bespoke energy efficiency products for its borrowers’ properties following a survey to identify which improvements will be needed.
Craig Calder, head of secured lending at Virgin Money, said: “To be part of the innovative Green Home Finance Accelerator project is important for Virgin Money as we look to reinforce our aspiration to halve our financed emissions by 2030 and deliver net zero by 2050.
“Working with industry experts Sero and Rightmove is an opportunity to research, test and learn what consumers want before we take a proposition to market – enabling us to provide a great product for customers while at the same time making a positive impact on the environment.”
Help for older homeowners
Phoenix Group will receive £102,249 to help older borrowers make their homes greener with the use of a lifetime mortgage, and Aviva Equity Release will receive £87,612 for a service which will allow homeowners to release equity from their homes and improve the energy efficiency.
Scott Brown, head of equity release pricing at Aviva, said: “Aviva is delighted to have secured funding from the government to explore building a green mortgage solution for later life lending.
“Aviva and the Department for Energy Security and Net Zero will co-fund our customer research to explore the development, which will aim to enable later life households to make home energy efficiency improvements, making their homes more comfortable to live in, reducing energy bills and helping drive a reduction in the carbon footprint of the UK’s housing stock.
“Given the value in the research being produced, Aviva commit to sharing the output when finalised with the wider industry to support industry level change.”
E.On, Kamma and Energy Savings Trust are also among the organisations which will receive funding.
After a six-month Discovery Phase period, the organisations will be able to apply for larger grants of between £200,000 and £2m to pilot their products and services.
Lord Callanan, minister for energy efficiency and green finance, said: “The government has put in place long-term commitments to ensure homes across the country have greater energy efficiency to reduce bills, drive down energy use and lower emissions.
“We are supporting these organisations to develop fresh and innovative ways of helping more people get better access to energy efficiency measures, such as loft insulation, double glazing and heat pumps.”
