Barclays offers green homes mortgage on select new builds

Barclays has launched a Green Home Mortgage scheme, offering homebuyers preferential interest rates and savings of more than £1,300 on energy-efficient new build houses.

The Barclays Green Home Mortgage will be available to customers from next week. It will offer lower interest rates of mortgages for home purchases with an A or B Energy Performance Certificate (EPC) rating.

Barclays’ head of mortgages Hannah Bernard said: “We are increasingly hearing from our mortgage customers that they’re interested in purchasing an energy efficient home. Given Barclays commitment to supporting our customers’ transition to a low-carbon and sustainable lifestyle, we have compelling reasons to launch this pioneering product.

“We’re proud to be the first major UK mortgage lender to offer a product that helps home buyers in their decision to purchase a Green new-build home.”

The offer will initially cover new builds from UK housebuilders Barratt Homes, Berkeley Group, Countryside Properties, Crest Nicholson and Redrow Homes. Barclays will work to expand the offer to additional companies and homebuying scenarios throughout 2018.

Barclays Mortgages will offer preferential interest rates on two and five-year fixed rate mortgages up to 90% loan-to-value (LTV) and Help To Buy mortgages up to 75% LTV. Homebuyers could save up to £750 on a £150,000 mortgage over the five-year fixed term. When combined with the energy savings of the higher EPC-banded homes, consumers could save up to £1,335, according to Barclays.

The launch takes place just weeks after the Minimum Energy Efficiency Standard (MEES) entered into force, imposing new rules on both domestic and commercial properties within the private rental sector. These new rules will prohibit landlords from granting a tenancy to new or existing tenants if the property has an EPC rating below band ‘E’.

Green Finance Taskforce

The banking firm offered the mortgage scheme as part of a response to the recommendations of the UK Government’s Green Finance Taskforce, established to assist the low-carbon economy and boost the UK’s position as a “world leader” in clean growth investment.

The Taskforce recently published a ten-point list of investment guidelines, including new measures for residential and commercial properties, boosting investment into innovative clean technologies and creating a Green Investment Accelerator for early stage technology grant funding.

Commenting on the Barclays mortgage announcement, the energy and clean growth minister Claire Perry added: “As part of our Clean Growth Strategy, the Government is committed to supporting the development of green mortgage products and enhancing our reputation as a world-leading green finance sector.

“As well as the prospect of an exciting new energy efficient home for consumers, the launch of Barclays Green Home Mortgage, a major UK financial institution, is exactly the kind of progress I want to see more of as we consider the recommendations of the Government commissioned Green Finance Taskforce.”

In December last year, Barclays launched a range of Green Loans, targeting UK clients who require more than £3m in funding.  In 2016, the bank raised £21.1bn in finance for environmental and societal schemes.

Matt Mace

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