Green Mortgage

Are you a householder? Researchers on the LENDERS project are seeking your help to create "greener" mortgages.

10th June 2016

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Are you a householder? Researchers on the LENDERS project are seeking your help to create "greener" mortgages.

The partners behind the green mortgage research project called LENDERS are asking householders for their help to complete a survey that aims to gather key information on homes, their energy ratings and their actual energy bills.

The “LENDERS” project, conceived by BRE and developed from initial research with CEW, is a collaboration between BRE, Nationwide Building Society, Principality Building Society, Energy Savings Trust, UKGBC, UCL, ARUP and CEW. It looks at ways of moving away from current estimates of energy costs in the mortgage lending process and towards more detailed affordability calculations based on the individual property.

Part funded by Innovate UK, the project proposes to make a subtle change to the way mortgage companies assess what customers applying for their loans can afford. Currently, a customer’s incomings and outgoings are assessed via an ‘affordability calculation’. Energy costs represent the largest unavoidable cost that is factored into this calculation for a customer after the mortgage repayments themselves.

Despite the availability of Energy Performance Certificates (EPCs) on all properties being sold, no consideration of the energy efficiency of the property being mortgaged is made, and the assumed energy costs currently only vary by around £25 per month and therefore have little impact on the capital mortgage amount the customer might be offered.

The research from the survey of householders is critical to the success of the LENDERS project.

The data gathered will be used to create more accurate information on energy costs and affordability that feeds into the mortgage lending process. Such detailed data could allow lenders to acknowledge that smaller fuel costs could allow more to be borrowed on the mortgage, encourage buyers towards more efficient buildings and potentially reflect the added value of such properties.

BRE’s Andy Sutton who is Project Lead on LENDERS said "The survey is critical to the success of our project - the more people who complete, the better informed we will be. It takes about 4 minutes to complete and all information gathered will be treated confidentially and will only be used to inform this project. We need to build a large evidence base, so we’d like to urge people to share the survey with friends and family."

To complete the survey respondents are asked to have their recent fuel bills and their home’s Energy Performance Certificate (EPC) to refer to, but if these are not available the survey can still be completed. The survey can be found here