26 October 2021

Building back greener

By Nicola Goldie, Head of National Accounts at Virgin Money

The future of housing centres on sustainability and new builds are leading the way, says Nicola Goldie, Head of National Accounts at Virgin Money.

There’s no escaping the reality of climate change and the need to act now.

August’s IPCC report was unequivocal about the causes and impact of climate change. It said that “climate change is widespread, rapid and intensifying and some trends are now irreversible”.

But the report offered hope too: “Strong and sustained reductions in emissions of carbon dioxide and other greenhouse gases could quickly make air quality better, and in 20 to 30 years global temperatures could stabilise.”

That requires immediate and drastic action, and we already know the housing market has a huge role to play, accounting for at least 15% of UK carbon emissions.

We need to educate consumers on the benefits of choosing energy efficient new homes or investing in retrofitting their existing homes to make them more efficient.

What’s already happening?

Energy Performance Certificate (EPC) ratings are a straightforward way to measure and compare the energy efficiency of existing properties, with the most energy efficient homes rated A through to G for the least.

There's been an increase in the supply of energy efficient homes over the past year, according to the Ministry of Housing, Communities & Local Government. It said that in the 12 months to June 2021, 251,000 EPCs were lodged for new build homes, an increase of 16% on the previous year.

From April to June 2021, 85% of these new properties were given an A or B rating.

In addition, government’s Future Homes Standard will be introduced in 2025 to complement building regulations. It aims to ensure that new homes produce at least 75% lower CO2 emissions compared with those built to current standards.

Modern methods of construction and off-site manufacturing can also improve the efficiency of homebuilding and is a growing sector, helping to make construction more sustainable.

Sustainable solutions

Energy efficient homes include good quality insulation and double glazing as standard, as well as features including solar panels, energy efficient boilers, air source or ground source heat pumps. Some new homes even include built-in electric car chargers.

We know we can build sustainable new homes but we can’t all live in one, so we need to find a way to improve the quality of existing housing stock too.

Encouraging consumers to retrofit existing homes to boost energy efficiency, either with government grants or funding or more generous mortgages, is one way.

Green mortgages

The mortgage market is playing its part too, with lower rates or cashback on offer to borrowers purchasing an energy efficient home or making home improvements to their existing property. This may also extend to more generous lending criteria available to those buying homes with a high EPC rating.

Reaching the net zero target will require behavioural changes for customers, as well as within the housing and energy markets. Educating consumers on the benefits of energy efficient homes needs to happen alongside this.

That’s why now is the right time for intermediaries to learn more about these benefits, green mortgage finance and the changes that are coming down the line for the housing market in the coming decades.

For more information on Virgin Money’s Greener Mortgages, visit our website. If you’ve got any questions, you can get in touch with your Business Development Manager or dedicated Regional Service Team.


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