Three in every five landlords are now interested in green buy-to-let mortgages, according to research by Mortgages for Business.
62% of landlords responded to the buy-to-let (BTL) broker’s survey saying they are interested in mortgages that reward borrowers with discounted rates for making their properties more energy-efficient and shrinking their carbon footprint.
Jeni Browne, director of Mortgages for Business, comments: “Much of the UK’s housing stock is very energy inefficient, making our homes a major source of greenhouse gas emissions. Improving the energy efficiency of the UK’s stock of housing is a priority in the fight against climate change.
“A green mortgage means that, once they can confirm they have a revised energy rating for their property, the right lender will recalculate their mortgage rate at a discount. There are various mortgage products out there but the best are applied on completion of an energy efficiency project and applied for the lifetime of a mortgage.
“Given housing accounts for such a significant chunk of the UK’s carbon emissions, it’s great that landlords are so interested in making greener choices – spurred on, no doubt, by the fact landlords are rushing to upgrade their properties to meet new EPC rating rules by 2028. Whatever the reasons, landlords now appear interested in joining the battle to combat climate change. That hasn’t always been the case.”
The results of this survey, which involved 300 landlords across the UK, showed none of the respondents who had acquired their first BTL property before the year 2000 had been interested in green mortgages at the time of purchase. Only 10% of the landlords who had acquired their first BTL property in the 2000s said they had been interested in green mortgages when they made the purchase.
Jeni Browne comments: “We started trading in 1990 and the findings of our poll match our experience of the market over the last 30 years. Landlords’ attitudes have changed dramatically, particularly in the last decade. Landlords should be interested in these products though – quite apart from the ethical considerations, green mortgages reward landlords with a lower rate when they shrink their carbon footprint.”
The research also found that less younger landlords were interested in green mortgages than older landlords. Only 50% of landlords under the age of 45 polled by Mortgages for Business said they were interested in green mortgages, compared to 66% of those over 45.
Jeni Browne comments: “Hopefully, our research will help drum up more lender supply. The UK’s largest lenders have launched a wave of climate-change products amid criticism over their slow response to global warming. For instance, one of the big lenders did launch a Green Mortgage last year and we’ve seen others follow suit but have only offered borrowers preferential rates when they purchase an energy efficient property – rather than rewarding those improving the ecological footprint of the UK’s housing stock. It’s not enough and that’s why they have failed to impress campaigners.
“Given Britain has just enjoyed the greenest Easter on record, with almost 80% of the energy used at lunchtime on Easter Sunday coming from zero-carbon sources such as solar and wind, the industry is in danger of falling behind the times unless we do our bit.”