A message to mortgage brokers sent by Amanda Bryden, head of Halifax Intermediaries and Scottish Widows Bank, reveals that the Halifax lends more to buyers of homes with good ratings on their Energy Performance Certificates.
“We know that typically, more energy efficient homes are cheaper to run. Using EPC data and energy bill analysis, we’re able to reflect that in mortgage affordability” she has told brokers.
As background information sent out to the mortgage sector, the Halifax says a home’s energy efficiency has an impact on energy bills which, in turn, has an impact on disposable income.
This change has been informed by detailed analysis of EPC ratings, energy transaction and mortgage data.
So borrowers buying the the most energy efficient homes – for example, EPC A and B rated – will be able to borrow more. Around 15% of UK homes are currently A or B rated.
Halifax says: “Homes with the lowest energy efficiency ratings, ie EPC F and G, will see a small reduction in the maximum loan amount. Around 3% of UK homes are F or G rated EPC C, D & E rated homes will see no change to the maximum loan amount”
Lloyds Banking Group, which includes Halifax. Lloyds Bank and Bank of Scotland, already offers support for existing homeowners wanting to improve the energy efficiency of their homes through a Green Living Rewards scheme which offers up to £2000 cash back on a range of energy efficient home improvements.
Lloyds Banking Group also offers a range of incentives on heat pumps, solar panels and insulation through partnership arrangements.
Alice Haine at Bestinvest says: “Green upgrades can be very expensive and while incentivising homeowners to make better choices is beneficial for the overall energy efficiency of the country’s housing stock, it risks creating a two-tier market where only those with the deepest pockets or those owning the newest houses can benefit.
“With the risk that older properties that require more substantial investment could see their values plummet, owners may be deterred from selling for fear they won’t secure the price they want. This could create a log jam in the market.”
