Eco-mortgages to benefit ‘green’ home buyers

'Green mortgages' and cash for energy-saving features are likely to be the next steps in the Government's drive to improve home energy efficiency, housing minister Yvette Cooper said on Thursday.

The measures would link mortgages and grants to Energy Performance Certificates (EPCs) required in all homes sold in England and Wales from June 2007, and could offer beneficial lending arrangements for houses with energy-saving heating, lighting and hot water systems, Yvette Cooper said.

Ongoing discussions with mortgage providers and energy companies would determine the details of the scheme, she said.

The EPCs, which will form part of Home Information Packs (HIPs), will give homes A-G ratings similar to those on fridges, and will be accompanied by advice on how to improve the energy efficiency of a particular property.

Apart from the incentives, householders who score highly on energy efficiency will benefit from money savings of around £300 a year on fuel bills, the ministry estimates, and with 27% of the UK’s carbon emissions currently coming from homes could help substantially reduce the UK’s greenhouse gas contribution.

Yvette Cooper said: ” Until now householders haven’t had energy efficiency facts about their houses upfront; but next June every homebuyer will know exactly how energy efficient their homes are – and how they can improve this. Why shouldn’t this information be used by mortgage lenders or energy companies?

“Other countries offer green mortgages which give homebuyers money to meet the costs of making energy saving improvements. In England, sixteen councils have piloted schemes with energy companies where council tax rebates are offered to people who make energy saving changes to their homes. EPCs offer great scope for incentives like these.”

Director of campaigns at WWF Paul King, said: “WWF has been campaigning for some time for financial incentives such as green mortgages to be introduced, to drive consumer demand for energy efficiency in the home. EPCs will provide financial services providers with a way of differentiating their products, such as mortgages or insurance, for more energy efficient homes for the first time.”

Austin Baggett, Head of the National Home Energy Rating (NHER) scheme, called for a stronger commitment from the Government on fiscal incentives for energy efficiency to accompany the ratings.

“Energy labels alone can’t achieve market transformation. We need to make it simpler and cheaper for households to take action and cut their carbon emissions. While the green mortgages that the Minister talked about are to be welcomed, we actually need the Government to be resolute and bring forward stronger fiscal incentives to encourage home owners to improve their energy rating.

“The energy efficiency of our housing stock is dreadful and take up of improvement measures has been painfully slow to date. For instance cavity wall insulation is one of the most cost-effective actions you can take. It can reduce heat loss through the wall by 60% and it can pay for itself in less than two years.

“And yet, of the 15 million homes with cavity walls, a staggering 10 million or so still don’t have any insulation in them,” he said.

Goska Romanowicz

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