Government want to link EPCs to mortgage lending

Posted: 22/11/2020

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The Department for Business, Energy and Industry Strategy (BEIS) wants to force lenders to reveal how green their mortgage portfolios are and, as a result, ‘support them to improve the average energy efficiency of the properties they finance’, the consultation document says.

In practice, this means the government hopes to shame lenders into ensuring the homes they grant mortgages for meet minimum EPC standards and persuade them to offer ‘green mortgages’ to reward compliant home owners.

The consultation document also suggests that the current requirement for all sales properties advertised by agents to have an EPC will be much more heavily policed in the future as the government uses EPCs as a key tool to reach its 2030 carbon neutral targets.

EPCs are already a feature of the buy-to-let mortgage market; mortgage lenders are currently required to ensure properties they lend against have reached at least an ‘E’ rating.

The consultation was published at the same time Boris Johnson announced the government’s Green Homes Grant it to be extended by a year to give landlords and home owners 12 months more to complete their upgrade projects.

But the plan is risky and could end up penalising buyers and sellers of older properties that can never reach high EPC ratings.

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