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Nearly half of lenders and third of brokers would welcome EPC policy reversal

  • 05/02/2024
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Nearly half of lenders and third of brokers would welcome EPC policy reversal
Almost half of mortgage lenders and nearly a third of advisers would welcome any decision to reverse Energy Performance Certificate (EPC) rating changes, whether by a current or newly elected government.

Prime Minister Rishi Sunak backtracked on upcoming EPC legislation that would have made it compulsory for lenders to improve the EPC rating of their properties to a minimum standard.

According to Mortgage Advice Bureau (MAB), which polled 49 lenders and 288 advisers, when asked what was needed to accelerate green mortgages, around one in three lenders cited increased public awareness and education of products, along with nearly a quarter of advisers.

Advocating for government policies and incentives that support green mortgage initiatives was pointed to as being 29 per cent of lenders and 18 per cent of advisers.

Approximately 18 per cent of lenders said that developing a wider range of green mortgage products tailored to different needs and budgets was important, going up to 22 per cent for advisers.

Only 14 per cent of lenders noted working with builders and contractors to promote energy-efficient home improvements, which fell to six per cent of advisers.

Around eight per cent of lenders said offering more competitive interest rates and incentives for green mortgage products would aid green mortgage development, compared to a quarter of advisers.

EPC ratings ‘climbing up prospective buyers’ wish lists’

Ben Thompson, deputy CEO of MAB, said: “With climate change continuing to be an issue we all must take seriously, everyone has a role to play to ensure UK homes are more energy efficient. At a policy and industry level, we have a responsibility to push the housing market to a more sustainable future – one that is as energy efficient as possible.

“The fact 82 per cent of lenders believe that the best way to achieve energy efficient homes is via builders and lenders is a surprise. There should be cross-industry collaboration and work with intermediaries who also can have a big role to play in the move towards a greener future.”

He added: “The UK has some of the oldest and least efficient homes in Europe, so the government scrapping plans to encourage landlords to improve their homes is not going to help solve the problem.

“However, we must note the concerns of landlords and look to work collaboratively, where the government focuses on using the carrot instead of the stick to encourage green changes. For example, looking to refund stamp duty once a property has been retrofitted might be one way to incentivise green changes.

“We must face the reality that the UK will need to upgrade its leaky housing stock. With energy bills in the spotlight, EPC ratings are climbing up prospective buyers’ wish lists, and if the housing market is to meet net-zero targets, properties need to be retrofitted. Green mortgage products (and the wider promotion of these) is one part of the puzzle, and now we must ensure these are being put to prospective buyers.”

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