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Householders are needed to help with green mortgage research that will create more accurate information on energy costs and affordability feeding into the mortgage lending process. The survey gathers key information anonymously on homes, their energy ratings and their actual energy bills, allowing lenders to acknowledge that smaller fuel costs could permit more to be borrowed on the mortgage, encourage buyers towards more efficient buildings and potentially reflect the added value of such properties.

The LENDERS project conceived by BRE, is funded by Innovate UK and chaired by Nationwide Building Society and brings together a number of mortgage lenders, building industry experts, green energy groups and sustainability bodies.

The project looks at ways of moving away from current estimates of energy costs in the mortgage lending process and towards more detailed affordability calculations based on the individual property, making a firm link between the energy information available for homes and their actual running costs. If adopted by mortgage companies, this subtle change in the ‘affordability calculation’ could result in geared mortgage offers, with higher capital amounts of up to £15,000 or more being offered to purchase low energy homes compared to otherwise similar inefficient properties. It also opens the opportunity for mortgage companies to offer mortgages with conditions, or home improvement additional loans, based on enhancing the energy performance of an existing property, meaning that those in poorly performing homes also have a route to finance energy improvements.

To complete the survey respondents are asked to have their recent fuel bills and their home’s Energy Performance Certificate (EPC) to refer to, but if these are not available the survey can still be completed. The data gathered cannot be identified back to an individual or home, but will help in showing the general trends.

Energy costs represent the largest unavoidable cost that is factored into this calculation for a customer after the mortgage repayments themselves.

Although it often feels too big and too remote from our daily lives, we all need to be engaged in the efforts to mitigate the impacts of climate change – the “stopping” climate change boat has already sailed. This means all those little steps do matter: cycling not driving, turning the lights off and using electricity off peak, wasting less and recycling, and so on.

However, there are big changes we need to make to the fabric of our society too. These include decarbonising the energy grid and introducing demand/supply sophistication, as well as improving the quality of public transport. Critical to this is embedding in our institutional processes the need for energy efficiency.

Through the LENDERS project, the goal is to embed energy efficiency into the bedrock of our mortgage institutions, and through this society’s approach to thinking about energy when making the important step of buying or selling a property. After all, who buys a car these days without at least looking at the fuel economy and road tax costs?

LENDERS is currently collecting data to underpin the project’s findings, so if you’re in a home with an EPC and are willing to help, please complete this brief online survey.

About the Author
Associate Director for BRE Wales

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