The project, known as LENDERS will do two things – firstly it will build an evidence base to support the case for the inclusion of these figures.

For example, the UKGBC recently released research showing that energy-efficient homes would be more valuable if banks and building societies used more accurate estimates of household energy bills in their mortgage calculations.

Secondly the LENDERS project will create a methodology that will enable mortgage lenders to easily incorporate energy efficiency ratings into their calculations.

Initially, members of the project will test the use of Energy Performance Certificates (EPCs) in estimating energy costs in individual homes.

UKGBC chief executive Julie Hirigoyen said: “With energy bills representing one of the biggest costs that households face, it seems common sense for lenders to take them into account when assessing mortgage affordability. But despite this helping to reduce lending risks and encourage retrofit, it has so far failed to become mainstream practice with banks and building societies.”

“If LENDERS is successful, it could have a transformative impact on the building industry, potentially translating into efficient homes gaining value relative to their inefficient counterparts.”


Supported and part funded by Innovate UK, the research draws on the expertise of diverse groups with green credentials, including Nationwide Building Society, Principality Building Society, Zero Carbon Hub, Constructing Excellence in Wales, BRE, Energy Saving Trust, Arup and University College London (UCL).

Chair of the LENDERS project and head of mortgage policy at Nationwide, Andrew Baddeley-Chappell said: “The research will look at ways of moving away from current estimates of energy costs and towards more detailed affordability calculations based on the individual property.

“Fuel charges are the largest unavoidable household costs and may vary by a large degree. Such detailed data could allow lenders to acknowledge that smaller fuel costs could allow more to be borrowed on the mortgage, nudge buyers towards more efficient buildings and potentially reflect the added value of such properties”.

In last week’s Autumn Statement, domestic energy efficiency plans appeared to take a hit, as George Osborne said the Energy Company Obligation (ECO) would be reformed to cut household energy bills.

The proposed replacement will have a budget around half of the ECO scheme and is expected to significantly lower the amount of houses being insulated every year.

Brad Allen

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie