In a report released by the trade body, entitled Unlocking Demand for Green Home Finance, UK Finance calls for a combination of targeted policy measures, public information campaigns and advisory services.
It claims this approach will encourage homeowners, landlords, and housing associations to retrofit their properties.
High costs for heat pumps
The report draws on YouGov research to show the attitudes of UK consumers specifically towards heat pump technology.
The UK needs to install around 1.5 million heat pumps per year by 2035 to meet its carbon reduction goals, yet consumer adoption rates fall very short of these targets.
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The research found that 54% said the main barrier discouraging them from getting a heat pump was the high upfront cost, while 44% said they would switch if they were provided with a clear idea of the savings in running costs.
UK Finance said encouraging green home upgrades requires more than financing.
Nine-point plan
The trade body sets out nine recommendations that it says should be embedded within the government’s upcoming Warm Homes Plan, which are:
- Establish a government-led body or group to drive collaboration across key stakeholders
- Provide certainty for firms involved in retrofitting
- Launch a public awareness campaign with independent guidance to counter misinformation
- Provide grants, subsidies, and a coordinated plan to train sufficient tradespeople
- Rebalance electricity and gas prices through adjustments to levies/targeted support
- Deploy government funding to enable lower-cost green home lending
- Maintain and expand grant programmes to support green home improvements
- Set clear long-term expectations so households and firms can prepare
- Update energy-efficiency metrics for accurate property performance and consistency
Ian Bhullar, director of sustainability policy at UK Finance, said: “To meet our ambitious targets on greening the UK’s housing stock, we need to drive demand and convince the public of the benefits.
“Lenders are committed to playing their part, and through the government’s Warm Homes Plan, we have the opportunity to really make a difference. Increasing demand for green home improvements will bring significant benefits, stimulate job creation, drive innovation, and reinforce the UK’s energy security in an increasingly volatile global market.”
Read the latest blog from Rachel Doy, senior policy adviser at the Association of Mortgage Intermediaries (AMI), on what the Green Mortgage Advice Initiative is doing to ensure that mortgage advisers have the knowledge, resources, and confidence to engage customers on the topic of green mortgages.
