Lenders Core Report
On 18 July 2017, a report was published by a consortium of industry experts, making the case for factoring energy ratings into mortgage offers. The consortium includes; Arup, BRE (Building Research Establishment), the Energy Saving Trust, UCL Energy Institute, the UK Green Building Council, and others.
The LENDERS project set out to demonstrate that improved analysis of household energy costs could improve mortgage affordability assessments. As a result, larger loans could be accessed by mortgage borrowers, depending on the energy efficiency of the property. The hope is that if home buyers are offered higher mortgages for buying a lower energy home, purchasing behaviours may shift towards that part of the market.
Funded by Innovate UK, the project looked at data from 40,000 homes and demonstrated the link between energy efficiency and household fuel bills. The report suggests that, although estate agents’ property listings are required by law to display energy performance certificates (EPCs), energy bill costs and energy efficiency are relatively low in purchasers priorities, and are not considered in mortgage lenders’ affordability calculations.
Buyers would not have to borrow the additional money, the report says, but they would be attracted by the implied ‘perception of value’ of the higher borrowing limits, resulting in well-insulated homes selling faster and commanding a modest price premium. The report’s recommendations are the latest in a series of incentives aimed at encouraging home insulation and greener properties for home buyers.
Richard Twinn, a policy adviser at the UK Green Building Council, said: “This new research shows that if lenders use information about a property’s energy performance when making lending decisions, this could encourage homebuyers to choose more efficient homes by increasing the size of mortgage available for these properties.”
Claire Perry, MP, Minster for Climate Change and Industry, said: “This government is committed to making home ownership affordable for all. More accurate estimates of household energy costs could improve lending practices, lead to new sources of finance and increase energy efficiency across the country. That's why government funded this project through Innovate UK and looks forward to seeing the industry take action in response.”
The consortium has created a new consumer calculator www.epcmortgage.org.uk to demonstrate the cost benefits of fuel efficiency, enabling would-be buyers to see the benefits of energy efficient homes.
The Lenders Core Report is available to download from UK-GBC here.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
- Council of Mortgage Lenders.
- Display energy certificate.
- Do green buildings pay?
- Energy performance certificate.
- Energy targets for buildings.
- Green mortgage.
- Minimum energy efficiency standard regulations for domestic and non-domestic buildings.
- Minimum energy efficiency standard (MEES).
- What is a mortgage?
Featured articles and news
Walter Segal: self-built architect
A definitive book on a pioneer of green architecture.
Funding for heritage on the high street
Using heritage as a catalyst for reviving historic centres.
Commonwealth Heads of Government Meeting update.
Declaration prioritising sustainable urbanisation adopted.
A small hidden, often distant but key building component.
Some brief words about the actuator.
CIAT Chief Executive steps down.
After 34 years at the Institute.
Volunteer opportunity launched by the ICE
To support the next generation of engineers.
Provisional findings show illegal cartels in the industry.
CIAT reporting from the Competition and Markets Authority.
Making sustainable construction number one priority.
The future of construction report.
Interview with ECA CEO.
Many provisions came into force on June 28, 2022.
With room to expand.
An information packed session at the BSRIA conference.
Refurbishment, Energy Efficiency, Indoor air and process.
Considering building acoustics with the AT Journal.
Why building acoustic considerations must be non-negotiable.
Create a profile, write informed product articles and share.
Aluminium Composite Panels (ACP) is one example.
Top 50 Women in engineering 2022.
Inventors and innovators at ICE.
Life, death and art at the Stuart court. Book review.
Real estate, place adaptation and innovation.
Review and comment on the revised draft before July 11.
We are indeed now 10 years old, so go on and be bold !
Write about something you know, help us build and grow !
IHBC's 25th anniversary 2022 Aberdeen School.
A blended event and triumphant return.
New Construction Leadership Council Co-Chair selected.
Mark Reynolds succeeds Andy Mitchell as Co-Chair of CLC
Designing Buildings is 10 years old.
Types of work to existing buildings.
From alteration to deconstruction on DB.