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How lenders are contributing to a more sustainable future
I'm sure that every homeowner and landlord would choose to own the most energy-efficient properties. However, the reality is that a large portion of the UK housing stock was not originally constructed to high energy efficiency standards, aside from new builds, and many have not been upgraded for various reasons.
This was outlined in recent study from Rightmove which revealed that at least 18 million homes in the UK have an EPC rating of D or below, accounting for more than half (55%) of all housing stock. It also found that the primary motivator for homeowners to make green changes is the reduction of energy bills.
The analysis of government data shows that the average energy bill of a three-bedroom house with an EPC rating of F is £4,431 per year, compared with £1,669 for the same sized house with an EPC rating of C – that’s just 37% of the cost, and a difference of £2,762 annually.
Prospective buyers also financial benefits as a key driving factor, with 22% hoping that these energy-efficient changes could potentially lead to more favourable mortgage deals. Additional reasons included believing that these upgrades will enhance the overall liveability of their properties or that the improvements make their homes more desirable when it comes time to sell.
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The challenge lies in improving a property's EPC rating, which can involve anything from minor adjustments to significant renovations. These improvements, driven by motivations and potential financial benefits, inevitably come with additional costs that must be considered.
Despite the evident demand for green solutions, a perceived lack of accessibility and understanding continues to hinder their adoption. However, significant strides have been made in raising the profile of green finance. Lenders in both mainstream and specialist markets are consistently evolving their offerings to meet these shifting consumer demands.
At Foundation Home Loans, we offer products aimed at both landlords and owner-occupiers who wish to improve their properties' energy efficiency. Our newly launched EPC Saver options provide significant cashback and consultancy support to help property owners enhance their EPC ratings, benefiting both them and their tenants, while also contributing to the reduction of carbon emissions from the UK’s property stock.
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