Paragon Development Finance launches SME green initiative

Developers building homes with an A-rate Energy Performance Certificate (EPC) will receive a 50 per cent reduction on loan exit fees.

The standard exit fee is between one and two per cent of the gross loan amount and is charged on expiry or repayment of the loan.

At least five private units must be built within the development of which 80 per cent must have an EPC rating of A. Any remaining homes built must be at least an EPC C standard.

The initiative is designed to support the UK government’s target of net zero carbon emissions by 2050 and the reduction of emissions by 78 per cent by 2035. The Future Homes Standard, from 2025, will require new homes built to produce between 75 per cent and 80 per cent fewer carbon emissions.

Government data showed that of the 222,966 EPC ratings lodged for new domestic dwellings last year, just 3,457 were rated at EPC A level. Just over 80 per cent were rated at EPC B.

Robert Orr, Paragon Development Dinance managing director, said: “The direction of travel is clear – we need to start building more homes in the UK that will help deliver the government target of net zero by 2050.

“Many housebuilders are already adopting measures to improve the energy efficiency of their homes and there are early signs consumer sentiment is shifting towards a preference for more sustainable homes. However, only 1.5 per cent of new homes last year had the highest EPC rating, so we need to do more.”