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Borrower awareness and interest low on green mortgages, advisers say

  • 03/01/2024
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Borrower awareness and interest low on green mortgages, advisers say
A larger proportion of mortgage advisers are finding that clients have not heard of green mortgages, a study from an advice firm found.

A report from Mortgage Advice Bureau (MAB) showed that 65 per cent of advisers said their clients were not aware and did not understand green mortgages, up from 63 per cent in 2022. 

The subject of green mortgages is also coming up less frequently, advisers said, with 16 per cent of conversations happening without a mention of product compared to 12 per cent the year before. 

Advisers put this down to the uncertainty of 2023, with 52 per cent saying clients were more concerned about the rising cost of living which made it hard to broach the subject of EPCs and retrofitting. 


Challenges with green mortgages

Regarding the difficulties around borrower awareness and green mortgages, 17 per cent of advisers said information overload was an issue while 11 per cent said conflicting messages made it hard to educate clients. 

Some eight per cent suggested that the government softening its net zero requirements for homeowners and landlords made it harder to inform clients of green mortgages and seven per cent said there were challenges around the inaccuracy of EPC ratings. 

As for how this could be resolved, 22 per cent of advisers said there needed to be more public awareness and education on the benefits of green mortgages. A quarter of respondents said lenders should offer more competitive rates and incentives, while 22 per cent said a broader product range was needed. 

Some 82 per cent of advisers said they only mentioned green mortgages if they knew clients had or were looking at a property which met product criteria. Although awareness of green mortgages among clients is low, 45 per cent of respondents said there had been noticeable progress in the green mortgage sector compared to a year prior. 


Still progress to be made 

Ben Thompson, deputy CEO at Mortgage Advice Bureau, said: “The past 12 months have seen advisers dealing with numerous challenges. Rising interest rates coupled with the higher cost of living has meant that for many customers, the cost of their mortgage has been front and centre. However, it remains vitally important that advisers keep having these conversations to inform customers if they (and the property they own/are buying) may be eligible for a green mortgage. 

“There is also still a lot of progress to be made in this area from an industry point of view, and more to be done to make green mortgages more attractive. This could be innovations that give customers the potential to borrow more, receive a lower interest rate, or by offering other benefits. As the market settles and finds a new normal, green mortgage innovation should be at the very forefront of the industry’s priorities.” 

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