How to best address the climate-related challenges involved in home ownership

Back in November 2020, some areas of the property market raised concerns over government proposals that would incentivise mortgage lenders to include EPCs in their lending decisions. These proposals formed part of the Department for Business, Energy & Industrial Strategy’s (BEIS’s) latest consultation ‘Improving home energy performance through lenders’ which closed on 12 February.

Essentially, the government is looking to all lenders to annually disclose portfolio-wide EPC data as well as the gross value of lending for energy improvement works. This will enable comparisons to be made between lenders and provide a picture of how energy performance ratings could influence lending decisions.

On the closing of this consultation, the Intermediary Mortgage Lenders Association (IMLA) issued the warning that these proposals could lead to lenders spending ‘disproportionate time and effort’ ensuring average energy ratings were at an acceptable level. The trade body said while it recognised the importance of addressing climate change and the role of lenders within this, it was also concerned that the compilation of an energy efficiency ‘league table’ could cause lenders to base their lending decisions on a property’s energy efficiency, rather than on a borrower’s needs.

This response highlights just how delicate a balancing act this is and serves to underline the need for a unified approach from the government, housebuilders, lenders, intermediaries and borrowers when addressing this pressing issue. Energy efficiency and sustainability are of huge importance to a growing number of homeowners and we, as an industry, need to help more people realise what practical changes they can make to their own property and lifestyle, while understanding the costs and financial benefit attached to these changes.

This rising demand is one of the main driving forces behind our partnership with Santander to offer existing mortgage customers – who are looking to move to a new property or take on additional borrowing on their existing mortgage – access to a free “Home Energy Report” called EnergyFact. The aim is to provide homeowners with a series of suggested improvements, provide a cost for completing the work and a calculation of how much they would save on energy bills in the process. The report does not require a surveyor’s visit and is generated through a new dedicated online portal. It utilises energy-related information about the property from sources including Energy Saving Trust and Landmark Valuation Services, along with details provided by the customer around their property’s size, age and construction, as well as their current utility usage.

Initiatives such as these form an integral part within our overall business strategy to tackle green issues and, in partnership with Landmark Valuation Services, Countrywide is the first residential surveyor to develop such a product. It also demonstrates the importance of businesses working together to support consumers in their efforts to improve their home’s carbon footprint.

Improving the energy performance of privately owned homes is embedded within the government’s wider strategy to decarbonise buildings cost-effectively. And the surveying sector – working alongside lenders and other partners – have a duty to help safeguard future generations where possible, meaning we must continue working hard to address the many climate-related challenges involved in home ownership.