Going green – landlords and investors eye up eco mortgage products

21 April 2021 | Investment

Going green - landlords and investors eye up eco mortgage products

Some 62% of landlords are now interested in mortgages which reward borrowers with discounted rates for making their properties more energy efficient and reducing their carbon footprint, according to Mortgages for Business.

The broker’s poll, which spoke to more than 300 landlords, found that barely any investors who bought a property before 2000 or in the noughties were interested in green mortgages when they made their purchase.

Interestingly, only half of landlords under 45 said they were interested in eco-friendly mortgages, compared to 66% of those aged 45 or over.

Advertisement

The study also found that 56% of female landlords are interested in green mortgages, compared to 64% of men.

Jeni Browne, director of Mortgages for Business, explains that green mortgages provide landlords with a discount once the energy rating for their property has been improved.

“The best are applied on completion of an energy efficiency project and applied for the lifetime of a mortgage,” she says.

“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.”

According to Browne, lenders are slowly offering more green mortgage products for landlords and investors.

“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.”

However, she says this is ‘not enough’ and that the efforts of the lending industry have so far failed to impress green 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,” adds Browne.

This post has originally been featured in Property Investor Today.