Energy Professors are calling for all home owners who are buying energy efficient properties, to have bigger and cheaper mortgages.
Experts from the UCL Energy Institute, suggest that mortgage lenders unfairly assume fuel costs on properties for being roughly £1,300 a year, when in fact, energy-conscious home owners may have much lower gas and energy bills. This is seen as penalising green home owners.
They propose that if lenders were to take a properties energy performance rating into consideration when providing a loan, the home owners should be eligible for an extra £45,000 for their mortgage.
One of UCL's energy researches, Ian Hamilton, states that it is crucial for banks to assess people's ability of repayment in accordance to their energy data on the property in question. Therefore, when buying a home, energy conscious home owners are given much more fair and accurate mortgages.
The new proposed 'Green Mortgage', works by lenders looking at the Energy Performance Certificates (EPC's) for properties, which outline the energy rating for a home in how energy efficient it is. An EPC is lawfully required every time a property is up for sale. With the high performing properties, energy bills will cost a lot less, allowing them to have a higher mortgage.
This is different in comparison to how mortgage lenders are calculating energy spending, as currently only income, household size and your region is taken into account.
In response to this, mortgage lenders have deemed this proposal as "unworkable". Furthermore, critics have warned that this new policy may penalise buyers who are only able to afford run-down homes.
This policy has been used before by a few specialist lenders such as Ecology Building Society and Norwich & Peterborough Building Society, showing how 'Green Mortgages' are a possibility for the future of green home owners.
Compliance365 is an independent energy consultancy. We provide advice and guidance on all our services; how to save energy; how to save money on your energy bills; and ultimately how to become more energy efficient. Our aim is to be as cost effective and flexible as possible for our clients.
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