- Government schemes will encourage mortgagee to go for green houses
- This means occupants of old properties may struggle to sell or re-mortgage
- Making a home more eco-friendly can cost thousands
Homeowners may be forced to make their home more energy efficient under the new government Net Zero statehood unveiled today.
Mortgage lenders will be forced to keep data on how energy efficient the homes they’ve lent money to and disclose this to the government. They would also need to set goals for themselves to improve how well insulated the houses were on their books.
This means that properties that do not meet these standards may be difficult or even impossible for homeowners to re-mortgage or sell.
Boris Johnson launched Net Zero strategy today and claims government is taking ‘bold action’ against climate change
Some lenders, including Virgin Money and Nationwide, are already offering incentives for those who have greener homes and are trying to increase the numbers on their books.
These ‘green’ mortgages have increased fivefold since April, and those with energy efficient homes may soon be able to borrow up to £12,000 more on their mortgage with a lender.
The government’s plans were published in Net Zero Strategy, which outlines Boris Johnson’s plans to meet climate goals such as reaching net zero carbon by 2050. They are also part of ongoing government consultations.
If implemented this could mean that homeowners will have to make costly energy efficiency improvements if they want to sell their properties.
For example the cost of installing an environmentally friendly ground source heat pump can exceed £20,000.
Energy efficiency is measured by the EPC rating which ranks properties from A to most efficient, G to least.
It is difficult for those living in old houses and old houses to make their homes green. According to Rightmove, about 1.7 million homes in England and Wales with an EPC rating between D and G cannot be improved to reach a C rating.
Net Zero Strategy, published by the Department of Business, Energy and Industrial Strategy, said: ‘We are working with mortgage lenders to support homeowners to improve the energy performance of their properties.
‘The government is also exploring the case for another Green Home Finance Innovation Program, which focuses on supporting lenders to develop green finance products targeted at consumer types that will be affected by future regulation.’
Prime Minister Boris Johnson said: ‘The road to the UK to end our contribution to climate change will be paved with well-paying jobs, billions of investments and thriving green industries – powering our green industrial revolution across the country. Will do
‘By stepping first and taking bold action, we will build a defined competitive edge in electric vehicles, offshore wind, carbon capture technology and more, supporting people and businesses along the way.’