Last month saw Barclays announce plans to launch a green mortgage where buyers of new-build energy efficient homes can access lower interest rates. The product will be open to anyone purchasing a new build home with an Energy Performance Certification (EPC) rating of A or B but it must have been developed by one of five large housebuilders – Barratt Homes, Berkeley Group, Crest Nicholson, Countryside Properties and Redrow.
Green mortgages, however, are nothing new to long standing AECB members, The Ecology Building Society who have offered discounted mortgage rates for both low energy new builds and retrofits for over 30 years. Paul Ellis, CEO of Ecology Building Society questions how effective Barclay’s new scheme will be and whether the Government could do more to extend the green mortgage market with a view to bringing the UK’s housing stock to modern standards:
“If we are to meet our Paris climate agreement commitments, the finance sector needs to support the transition to a low-carbon economy.
“Ecology has pioneered green mortgages for over 30 years offering discounts for the life of the mortgage of up to 1.25% for the most energy-efficient new and self-build homes, supporting the take-up of green building materials and low energy techniques such as Passivhaus and the AECB Building Standard, and up to 1.5% for renovation of existing buildings which is crucial given the challenge of retrofitting our existing housing stock.
“While it is positive to see another lender starting to offer a green mortgage, there’s no reason to think that this tie-up with the large house builders will do anything more than provide a modest reduction in mortgage payments for some new-build homes that were already going to be built. So this initiative may prove to be little more than a small initial step on what needs to be a permanent and committed journey.
“Following publication of the Green Finance Taskforce’s recommendations, the Government needs to grasp the opportunity to support the green mortgage market further, with meaningful incentives for people to build or retrofit their homes to a high energy-efficiency standard. All our lending already takes green factors into account so we welcome the proposals to increase the visibility of energy efficiency ratings during the mortgage process. We are also encouraged by consideration of radical measures such as stamp duty reform which would help spur homeowners to take action.”
For more information on the AECB Building Standard click here.
Ecology Building Society members qualify for a 10% reduction on their annual AECB membership fee.