Brokers and lenders, your planet needs you – Keystone

While his message to encourage the nation to join the war effort may seem like it belongs to another time, perhaps it deserves to be dusted off in the face of a much bigger threat.  

I am, of course, talking about climate change.  

Most scientists agree that we are running out of time to contain global warming and to stave off the worst environmental effects of the climate crisis.  

Yet for all of the gains we have made in reducing emissions in recent years, progress still seems all too slow. 

And while it is clear the UK’s mortgage market is waking up to the threat of climate change, it feels as though we have not really started to turn words into actions. 

The UK housing stock accounts for 21 per cent of gas emissions and therefore is in prime position to make changes to impact and reduce emissions.   

The government is proposing that from April 2025 any property let out by landlords to new tenants will require an EPC rating of C or above, with all existing tenancies forced to comply by 2028. 

It may not seem immediately obvious, but this in itself has thrust brokers and lenders into the frontline in the struggle to make the nation’s housing stock more energy efficient.  

Penalties ahead 

For argument’s sake, let’s say it is the middle of 2023 and you have just remortgaged a landlord client with an E-rated property onto a five-year fixed rate. Let’s also assume that you have not made your client aware of the need to upgrade his property by 2025 or 2028. 

What happens then when that property comes up for remortgage again in 2028 and it still has an EPC rating of E?  

Not only will your client no longer be able to let out their property, but they will also struggle to find lenders willing to refinance it.  

On top of that, they will also probably find it increasingly difficult to sell the property without first carrying out the work required to improve its EPC rating. Even by then, homeowners will be aware of their own impending deadline in April 2030. 

In other words, that client may not only become a mortgage prisoner but also a property prisoner, too.  

To avoid this, we need to act now, in unison, as an industry. 

For brokers, that means making sure that your clients are aware of their responsibilities in the coming years.  

For lenders, it means ensuring we offer the appropriate awareness, education and products to help ease the financial burden of making the required energy efficiency changes. 

The struggle to retrofit the nation’s housing stock has begun. Brokers and lenders, your planet – and your clients – need you.