Once a landlord can confirm they have a revised energy rating for their property, the right lender will recalculate their mortgage rate at a discount.
“There are various mortgage products out there but the best are applied on completion of an energy efficiency project and applied for the lifetime of a mortgage,” Browne adds. “Given housing accounts for such a significant chunk of the UK’s carbon emissions, it’s great that landlords are so interested in making greener choices - spurred on, no doubt, by the fact landlords are rushing to upgrade their properties to meet new EPC rating rules by 2028.”
“Whatever the reasons, landlords now appear interested in joining the battle to combat climate change. That hasn’t always been the case.”
Green mortgages more popular than ever
Mortgages for Business' poll of more than 300 UK landlords showed none of the landlords who had purchased their first buy-to-let property before 2000 said they had been interested in green mortgages at the time.
Only 10% of the landlords who had acquired their first BTL property in the noughties said they had been interested in green mortgages when they made the purchase.
Browne explains: “We started trading in 1990 and the findings of our poll match our experience of the market over the last 30 years. Landlords’ attitudes have changed dramatically, particularly in the last decade.”
“Landlords should be interested in these products though – quite apart from the ethical considerations, green mortgages reward landlords with a lower rate when they shrink their carbon footprint.”
Older landlords give eco mortgages green light
Perhaps unsurprisingly, younger landlords were less interested in green mortgages than older landlords.
Only 50% of landlords under 45 polled said they were interested in green mortgages, compared to two thirds of those over 45 (66%).
What about lender supply?
Recently, buy-to-let lender Keystone Property Finance announced the launch of a new Green Product Range.
Browne says: “The UK’s largest lenders have launched a wave of climate-change products amid criticism over their slow response to global warming.”
“For instance, one of the big lenders did launch a Green Mortgage last year and we’ve seen others follow suit but have only offered borrowers preferential rates when they purchase an energy-efficient property – rather than rewarding those improving the ecological footprint of the UK’s housing stock.”
According to Browne, this is not enough. “Given Britain has just enjoyed the greenest Easter on record, with almost 80% of the energy used at lunchtime on Easter Sunday coming from zero-carbon sources such as solar and wind, the industry is in danger of falling behind the times unless we do our bit.”
Male versus female landlords
The poll also unearthed some stark changes in the attitudes of men and women. Only one in seven (15%) of female landlords said they were interested in green mortgages when they first started investing in property, compared to only 7% of men.
However, roughly 11 in 20 female landlords (56%) are currently interested, compared to 13 in 20 male landlords (64%).
Green investments – bitcoin versus property
Mortgages for Business also highlighted the potential eco-friendliness of property investment compared to asset classes such as bitcoin.
Browne says: “A property investment via a green mortgage – rewarding you for making carbon-saving improvements – compares favourably to speculating in cryptocurrencies.”
“The energy consumed mining cryptocurrencies, including bitcoin, in China will rival the entire greenhouse gas emission output of Italy within the next two years if allowed to continue unchecked! By way of contract, putting your money into property could actually do the planet some good.”
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