A prominent mortgage lender says stamp duty reform should be used as an incentive to drive landlords and other borrowers into improving energy efficiency.

No fewer than 93% of mortgage advisers say the topic of EPC ratings has come up with clients in the last 12 months, according to a Mortgage Advice Bureau survey. 

MAB says the large majority of brokers (86%) acknowledge that they play a critical role in educating consumers about green mortgages and EPC ratings, with the government and the media also being named as pivotal influences (68% and 64% respectively).

Yet there’s only been a modest growth in awareness of so-called green mortgages, with 65% of advisers reporting last year that their customers had not heard of them, which has now decreased to 61%.

One in 10 (10%) advisers say that collaborating with builders and contractors to promote energy-efficient home improvements could also support the decarbonisation of Britain’s homes. Meanwhile, the same number (10%) believe a wider range of green mortgage products tailored to different needs and budgets should be developed.

The research also found that 91% of advisers feel comfortable talking about EPC ratings with their customers. They confirm that customers most frequently ask about the eligibility criteria of secured mortgage products for retrofitting (28%), followed closely by enquiries about the benefits of financing retrofit activities through secured mortgage products (over half of advisers report).

The mortgage industry’s efforts to help customers make more eco-conscious choices are also accelerating. 

According to the survey, over half (52%) of advisers have noticed progress in the green mortgage sector over the previous 12 months, compared to 45% last year.

The research follows a call to the government from prominent lenders and mortgage brokers to introduce key reforms to Stamp Duty, aimed at boosting energy efficiency in properties and stimulating the housing market.

The group – led by Mortgage Advice Bureau and including TSB, Leeds Building Society, and Coventry Building Society – called on the Chancellor of the Exchequer, proposing a Stamp Duty refund for homebuyers who retrofit their property to achieve an Energy Performance Certificate rating of C or higher. 

The group says this incentive would make energy efficient upgrades more affordable, support the UK’s net zero goals, and provide much-needed momentum to the housing sector.

An MAB spokesperson says: “Advisers play a crucial role in supporting and advising customers on retrofitting their homes. However, it’s a huge task, and one that we must all play our part in combatting. 

“The UK’s housing stock is some of the leakiest in Europe, and despite the previous UK government setting a goal to ensure that most homes achieve an Energy Performance Certificate (EPC) rating of C or above by 2035, 60% of our housing stock remains below this standard. 16 million properties in England and Wales will require retrofitting to meet this EPC benchmark. 

“This needs to be tackled in order to be successful in the race to net zero, and is something that both the mortgage industry and the government will need to work on, together with other sectors influencing the Built Environment. Enhancing the appeal of green mortgages through increasing the amount that can be borrowed, or offering a lower rate/cashback, could be powerful catalysts in helping us to transition into a more sustainable, environmentally-conscious housing sector.”