There is a worldwide shift towards being more sustainable, energy-efficient, and environmentally friendly.
Many people hope to change their daily routines so that they have less of a negative impact on the environment and banks also are doing their part by trying to offer solutions to these issues.
Recently, the number of green mortgages has increased, meaning that more options are available to choose from.
Speculation regarding upcoming changes to EPC upcoming changes to EPC targets means that landlords are being driven to improve the energy efficiency of their homes. Therefore, these green mortgages could be useful in the long term.
Here at Propcert, we explain what landlords can expect from the range of eco-friendly mortgages that have recently been launched.
What is a green mortgage?
Green mortgages offer buyers of energy-efficient homes incentives and beneficial terms. Examples of this could include cashback, a lower rate of interest, or an increased loan amount by the bank.
Homes that qualify for green mortgages are likely to be new builds because various elements that make a home environmentally-friendly, such as good insulation, heat pumps, and energy-efficient lighting, tend to already be embedded in these new developments.
However, those with older properties that perhaps do not have high EPC ratings could commit to improving the environmental impact of their home.
Whether making a property greener or purchasing a green home, the lender will reward landlords for this.
EPC ratings help to identify whether a home qualifies for a green mortgage. The higher the band rating, the more likely the bank will offer the products to you.
Why should these be considered by landlords?
There is a massive drive towards green mortgages because of the focus that has been placed on eco-friendly homes. New figures confirm that eco-related mortgages now make up 15% of all buy-to-let (BTL) products on the market.
Banks are supporting the push towards green home purchases because they recognise the long-term benefits. These types of homes are likely to receive better asking prices and there is growing demand for properties with good green credentials.
With interest rates increasing and the cost of living skyrocketing, tenants are seeking alternative ways to make ends meet. Green homes typically mean cheaper energy bills and cheaper energy bills could mean that mortgage repayments are easier for tenants to meet.
As pressure to improve property EPC ratings increases for landlords, they should get ahead by making use of the incentives green mortgages offer.
An increase in the variety of products
Overall, there has been a significant increase in the number of green mortgages available. According to the broker Mortgages for Business , there are currently 353 green BTL mortgage products. Whereas in August 2021 there were only 118 green BTL mortgages on the market.
Barclays and Natwest are among some of the UK lenders that have launched products that reward borrowers who take out a green mortgage.
Checks regarding eligibility are required as part of the application process. We advise that landlords make comparisons and spend time researching each product to ensure that it is right for them.
The average bill for landlords looking to improve their property is up to £15,0000. Therefore, making use of the green mortgages on the market could help landlords fund these improvements.
As a landlord, providing a green home for tenants has never been more important.
Here at Propcert, we can help landlords across the UK reach a higher EPC rating. The company was originally established in 2010 to meet the growing requirements of EPCs for the private and public sectors and has evolved into providing other services as we have grown.
For a full list of services please click here and contact us here for any more information on what we provide.
