Landlords Looking For Green Mortgage Products
Posted May 17th 2021
If you are active in the Buy-To-Let (BTL) market, it is likely you have a mortgage. If you are looking to expand your rental property portfolio, or enter the rental market, you might be in the market for a new mortgage.
A recent study undertaken by Mortgage for Business, suggests 60% of landlords say they interested in mortgages which reward energy-efficiency improvements at their rental premises.
This shouldn’t be a surprise, as there is a growing level of demand and interest in green solutions. Landlords know tenants are looking for greener rental property, and there are short and long-term benefits for all parties.
Jeni Browne is the director of Mortgages for Business, and said: “Much of the UK’s housing stock is very energy inefficient, making our homes a major source of greenhouse gas emissions. Improving the energy efficiency of the UK’s stock of housing is a priority in the fight against climate change.”
Jeni continued by saying; “A green mortgage means that, once they can confirm they have a revised energy rating for their property, the right lender will recalculate their mortgage rate at a discount. There are various mortgage products out there but the best are applied on completion of an energy efficiency project and applied for the lifetime of a mortgage. Given housing accounts for such a significant chunk of the UK’s carbon emissions, it’s great that landlords are so interested in making greener choices - spurred on, no doubt, by the fact landlords are rushing to upgrade their properties to meet new EPC rating rules by 2028. Whatever the reasons, landlords now appear interested in joining the battle to combat climate change. That hasn’t always been the case."
Landlords are updating their outlook
The survey spoke to more than 300 landlords in the UK, and it is fair to say this level of interest in greener solutions is a change from previous studies.
Jeni Browne, explains: “We started trading in 1990 and the findings of our poll match our experience of the market over the last 30 years. Landlords’ attitudes have changed dramatically, particularly in the last decade. Landlords should be interested in these products though - quite apart from the ethical considerations, green mortgages reward landlords with a lower rate when they shrink their carbon footprint.”
Mature landlords are focusing on green solutions
The findings suggest it is more mature landlords who are looking to benefit in this way, with the survey suggesting:
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66% of landlords aged 45 or older are in favour of green mortgages
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50% of landlords under 45 were interested in green mortgages
There have been some green mortgage products announced this spring, so landlords who are keen to manage their rental accommodation in this way, have options.
Jeni Browne, comments: “Hopefully, our research will help drum up more lender supply. The UK’s largest lenders have launched a wave of climate-change products amid criticism over their slow response to global warming. For instance, one of the big lenders did launch a Green Mortgage last year and we’ve seen others follow suit but have only offered borrowers preferential rates when they purchase an energy-efficient property - rather than rewarding those improving the ecological footprint of the UK’s housing stock.”
Jeni also said; “It’s not enough and that’s why they have failed to impress campaigners. Given Britain has just enjoyed the greenest Easter on record, with almost 80% of the energy used at lunchtime on Easter Sunday coming from zero-carbon sources such as solar and wind, the industry is in danger of falling behind the times unless we do our bit.”
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