www . simplybizmortgages . co . uk 29 gages are more expensive than standard mortgages , whereas most of those soon to launch will be cheaper or priced the same as a traditional product . [ 7 ] There ’ s a clear effort from green mortgage lenders to reduce barriers to uptake .
However , there are some constraints . While initiatives like the GHGS certainly get the ball rolling , increase consumer awareness and give borrowers an incentive to reduce their homes ’ carbon footprint , they don ’ t have a widescale impact . Only an estimated 600,000 homes will benefit from the scheme . In March 2021 , the government announced that the scheme ’ s funding will not roll over into 2022 as planned , and it is now thought that the scheme will be scrapped altogether . [ 8 ]
Most green schemes also centre on rewarding those who already have a good Energy Performance Certificate ( EPC ) rating rather than addressing the root issues presented by lower-rated , often older , housing stock . For example , Barclays offers a green mortgage which gives buyers access to lower interest rates when buying newbuild energy-efficient homes . Nationwide gives borrowers loans of up to £ 25,000 for green home improvements , as well as offering preferential rates to those who buy newbuild properties with an EPC rating of ‘ A ’. With approximately 17 million homes with an EPC rating below B and C , more needs to be done to incentivise homeowners to make small changes that can have a big impact collectively . [ 9 ]
This is where Kensington ’ s comes in . We stand out in the crowd of lenders touting their green credentials . One key distinguishing factor is our commitment to improve energy efficiency in homes , whether this be for new customers , those re-mortgaging or for landlords .
The eKo Cashback Mortgage , launched last year , offers up to £ 1,000 cashback for improvements homeowners make to the energy efficiency of their properties within the first 12 months of ownership . More recently the launch of the Buy to Let eKo Cashback mortgage allows landlords to go green too .
We hope that through these innovative products we can continue to incentivise homeowners and landlords to address their energy efficiency as well as encourage other lenders to follow suit
Kensington ’ s commitment to the green transition doesn ’ t stop there . We have also this year launched the New Build eKo Reward Mortgage which incentivises and rewards borrowers for purchasing an A or B EPC-rated new-build property with £ 500 cashback .
Earlier this year Kensington priced its latest Green Bond securitisation – the first green bond from a lender within the UK Asset Backed Securities market and the third issuer in Europe . Kensington will use the proceeds raised to continue developing its range of green products across the next few years , with targets to allocate more than £ 800 million to green loans by 2026 .
Kensington is demonstrably committed to sustainable lending . We hope that through these innovative products we can continue to incentivise homeowners and landlords to address their energy efficiency as well as encourage other lenders to follow suit . This , we hope , will show that we can together address the challenges of improving our country ’ s housing stock .
GROWING AWARENESS
Green mortgages are only one piece of a difficult jigsaw puzzle , but they are a significant one . A solution to the crisis we face can only come about with the growing awareness and a greater understanding of housing ’ s role in combating climate change which we are beginning to see .
To find out more or to place a case , get in touch with Kensington : www . kensingtonmortgages . co . uk / intermediaries
Call 0800 111 020
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Sources : 1 / 2 . www . gov . uk / government / news / over-athird-of-british-households-miss-out-on-bill-savings-bynot-changing-home-energy-use 3 . theconversation . com / cop26-heres-how-muchprogress-the-uk-has-made-on-three-key-net-zeropledges-169701 4 . www . gov . uk / government / news / housing-secretaryunveils-green-housing-revolution 5 / 6 / 7 . www . imla . org . uk / resources / publications / imlagreen-mortgages . pdf 8 . commonslibrary . parliament . uk / green-homes-grant / 9 . publications . parliament . uk / pa / cm201919 / cmselect / cmbeis / 124 / 12403 . htm