The government has announced funding for a series of green home finance projects in an effort to equip lenders to help homeowners improve the energy efficiency of their homes.
Under the government-backed pilot, projects are being developed that could ultimately see mortgage rates cut as a reward for energy efficiency upgrades, such as the installation of heat pumps. It’s said retrofitted properties could potentially save more than £460 a year on bills.
In total, £4.1 million has been awarded to 26 providers including Perenna Bank, who will receive more than £193,000 to help develop their long-term, fixed-rate green mortgage product.
Another trial will see buy-to-let landlords add the cost of making properties more energy efficient onto their mortgage – enabling them to borrow the money for the improvements and include it in their monthly repayments.
Ashman Bank Limited will be awarded £200,000 to design and develop this, which will assess a property’s energy efficiency, provide options on how it can be improved and incorporate the cost of carrying out the work on to the duration of the mortgage.
“The government has put in place long-term commitments to ensure homes across the country have greater energy efficiency to reduce bills, drive down energy use and lower emissions,” said Lord Callanan, Minister for Energy Efficiency and Green Finance:
“We are supporting these organisations to develop fresh and innovative ways of helping more people get better access to energy efficiency measures, such as loft insulation, double glazing and heat pumps.”
Other projects successful in bidding for funding include Aviva Equity Release UK Limited, who will receive £87,612 to design a service that allows homeowners to access equity in their property through a specialist lifetime mortgage, freeing up cash to improve the energy efficiency of their homes.
Clydesdale Bank PLC, trading as Virgin Money, will receive £171,000 for a product that will offer bespoke energy efficiency products for customers’ properties, after carrying out a survey to outline the improvements needed.
Following a six-month Discovery Phase period, all 26 Green Home Finance Accelerator projects will be able to apply for larger grant awards – between £200,000 and £2 million – to enable them to pilot their green finance products and services.
The Department for Energy Security and Net Zero said these investments form part of the £20 million Green Home Finance Accelerator, which is funded through the £1 billion Net Zero Innovation Portfolio.
Funding is aiming to help drive wider government efforts to ensure as many homes as possible reach an Energy Performance Certificate (EPC) band C by 2035.
