In a speech on the 19th April at the London Institute of Banking & Finance Mortgage Conference, David Geale, the FCA’s Director of Retail Banking highlighted that green mortgages have a growing role to play in decarbonising the UK’s housing stock. He also sees brokers playing a pivotal role in helping borrowers navigate a complex and nuanced landscape of green home finance.
The UK has some of the oldest and least energy efficient housing stock in Western Europe. While 60% of properties are still EPC rated D or below, the potential for improving energy efficiency of the UK housing stock is significant.
The Climate Change Committee wrote to the Chancellor in November 2022, explaining that ‘over 60% of households can achieve levels of energy efficiency that are compatible with Net Zero for less than £1,100′.
According to the Green Finance Institute, the availability of green mortgage products has increased over the past few years. To help landlords navigate the complex green mortgage market, brokers are fundamental in helping in that process.
Here are a few ways how brokers help their clients:
- Understand the Options:
Brokers should have a thorough understanding of the different types of green financing options available to landlords, such as energy-efficient mortgages and green loans. By understanding the various options, brokers can help landlords choose the best financing option for their needs. - Provide Advice:
Brokers can offer valuable advice on all aspects of buy-to-let mortgages, including the best time to remortgage, how to finance a property portfolio, and how to structure a mortgage to minimise tax liabilities. - Educate Landlords:
Brokers can help landlords understand the benefits of green financing, such as reduced energy costs, increased property and rental value, as well as any potential drawbacks. By providing landlords with comprehensive information, brokers can help landlords make informed decisions about their financing options. - Keep Up with Industry Trends:
The field of green financing is evolving, with new products and programs emerging regularly. Brokers can stay abreast of these developments and provide landlords with up-to-date information and guidance. - Application Processes:
Assist landlords in the application process, helping them to gather and submit the necessary documentation and navigate any additional requirements for green mortgages.
Why consider CHL Mortgages for a Green or Refurbishment Mortgage?
We have developed an innovative suite of refurbishment products which help landlords improve the energy efficiency and EPC rating of their properties.
18% of our mortgage applications during quarter 4 in 2022 were received from landlords looking to improve the condition of their rental property by using the refurbishment product options.
These Landlords have spent on average £24,587 on improvements (12% of pre works value), however, the resulting post works value has increased on average by £58,000 (22% of pre works value).
Ross Turrell Commercial Director commented.
“Brokers play a crucial role in helping landlords navigate the complex mortgage market, adding value by providing guidance, education, and connections. They will be even more vital in helping landlords find the right refurbishment or green mortgage product, ultimately leading to a more sustainable and profitable rental property that benefits the landlord and the tenant.”
CHL Mortgages has the EPC improvement mortgage solution