Energy efficiency drive could lead to bigger mortgages

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Government-funded research has found that homes that have a high energy efficiency rating are cheaper to run, and lenders should take this into account when assessing the size of a mortgage offer, says a article from July 2017.

Estate agents, when listing properties, must display the value of the Energy Performance Certificate. Houses are rated from A to G, with G being the highest rating for energy efficiency. High-rated buildings will use less energy and are cheaper to run. Currently, the running cost of a house is not assessed by mortgage lenders, but the research by the lenders group proposes that mortgage lenders could offer larger mortgage loans for homes that use less energy and are less expensive to run.

Frankie Crossley, writing for, says that the research might “nudge home buyers towards greener homes and commercial buildings.”

By 2018, landlords will not be permitted to offer new tenancies on houses that are energy rated less than E, unless they upgrade the property.

Commercial buildings also vary in their energy efficiency. If mortgage lenders follow the lenders group advice and offer larger mortgages for energy efficient homes, they could also apply the same criteria to commercial property by offering higher value commercial mortgages for energy efficient commercial buildings

Privately owned homes account for 15% of UK carbon emissions. Developers are being encouraged to build more energy efficient homes to reduce carbon emissions. If private and commercial mortgage lenders offer incentives to people purchasing greener homes, this could further help lower carbon emissions.

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