A positive step towards greener mortgages
Read our article “Green Mortgages: What are they, and do I need one?” to learn more about what Green Mortgages are.
In this article we are going to discuss their low-uptake, potential reasons behind this and why one lender may have just led the way towards a greener future.
Where are we now?
Since last writing about green mortgages, the need for energy efficiency has become even more apparent. With household energy bills skyrocketing and further increases expected soon, more and more of us are looking for ways we can reduce our energy spend.
At the time of our last article, we wrote that 60% of homes in the UK were currently rated band D or worse for their energy efficiency. Given the fact that a properties EPC (energy performance certificate) must score above a B, this goes a long way to explain why there has been such a slow uptake on these preferential mortgage products.
What houses are most efficient?
Other than specifically built eco-homes, it stands to reason that newer properties will be the most efficient. This is due to constantly improving building regulations which are becoming more and more aware of the need for sustainability.
Given this fact, it is quite puzzling when you realise that until now, buyers of new builds have been all but completely excluded from getting the benefit of a green mortgage product.
Why has it not been possible to get a green mortgage on a new build?
Other than specifically built eco-homes, it stands to reason that newer properties will be the most efficient. This is due to constantly improving building regulations which are becoming more and more aware of the need for sustainability.
Given this fact, it is quite puzzling when you realise that until now, buyers of new builds have been all but completely excluded from getting the benefit of a green mortgage product.
Why has it not been possible to get a green mortgage on a new build?
Whilst this initially seems completely ridiculous, the reason why is very logical.
New build properties are frequently purchased off-plan and often the property won’t be completed before the mortgage application has started. The EPC cannot be completed until the property build has been finished, therefore there hasn’t been a way of allowing a purchase to be made with a green mortgage on a property which has not had its energy rated assessed yet. That was until yesterday (Monday 8th August).
What has changed?
A top UK lender NatWest has now extended it’s Green Mortgage range to new build properties, although there are some limitations and they will only be offering them through the following eight developers:
This will also include any subsidiary companies of those listed above.
NatWest commented:
“As part of our climate commitments, we are pleased to announce the expansion of our Green Mortgage eligibility criteria to include some new build developers.”
This is fantastic news for the industry and new homes buyers up and down the country. We hope that more lenders recognise the steps NatWest are taking and come up with similar solutions for their customers too.
Should I apply for a Green Mortgage?
If your property has an EPC rating of B or above, then it is certainly an option. However, that doesn’t necessarily mean that it is the ideal choice for your unique circumstances.
Even if a lender is offering a discount for a green property, it doesn’t remove the possibility that there may still be a cheaper option available to you on the open market.
How to get in touch?
Check out what our Professional Sport clients had to say about our service HERE
0800 8620 840