Government proposals saying lenders should report on the energy ratings of properties they lend against risks wasting time and resources, The Intermediary Mortgage Lenders Association has said.
The trade body was responding to a Department for Business, Energy and Industrial Strategy (BEIS) consultation which proposes lenders annually disclose the average EPC rating of all properties they lend against.
IMLA said the government would be better focused on helping homeowners make improvements to their properties with the help of grants and loans.
Kate Davies, executive director, IMLA, said: “Lenders are taking the challenges posed by climate change very seriously, which is why many have already made significant moves to understand and prepare for the most immediate risks posed by our changing climate.
“They also recognise the important role the mortgage market has to play, with a growing number now offering ‘green mortgages’ to incentivise consumers to improve their property’s energy efficiency.
“However, these latest proposals from BEIS are highly unlikely to bring about real change. Rather, they would oblige lenders to devote way too much time compiling and disclosing data in an exercise which – at the end of the day – won’t change a single low-energy lightbulb.”
She added: “It makes more sense to ensure that property owners have really accurate information about the energy efficiency of their property – and the best place to start is by ensuring that EPCs are really fit for purpose.
“If a property’s energy efficiency is reflected in its value, homeowners will be incentivised to make improvements – which can be financed by a combination of loans, for those who can afford them, and government grants to help those who cannot.
“It makes no sense to create artificial competition between lenders which could result in their avoiding lending on properties that are less energy-efficient and therefore less desirable. In the worst case this could lead to some borrowers being unable to re-mortgage or sell. It is critical that this is avoided.”
This post has originally been featured in Property Wire.