Have we got the whole world in our hands?

This is something I’ve given a fair bit of thought to, not just because of the catchy tune that springs to mind, guaranteed to brighten any school assembly, but because our mortgage industry is increasingly under the spotlight for its contribution to, well I’m just going to say it, saving the world.?OK, yes, green agenda/net zero/carbon neutral, these all work, however perhaps not as fun to visualise mortgages swooping in to save the world.

But have we got the whole world in our hands? What’s the data behind the headlines? Why are ‘green’ topics occupying our corner of UK Industry? What does this mean for Mortgage Advisors and their customers? When better to consider this than World Environmental Day… (well a few days after, it was a Bank Holiday weekend after all!)

Did you know for example, that the UK’s housing stock is one of the oldest in Europe. Around 20% of our homes we built before 1919[1]! A figure from the same report that made me feel chilly just reading it: approximately 50% of UK homes have uninsulated walls! In fact, the UK Climate Change Committee has estimated that ￡250 billion needs to be invested in UK home upgrades by 2050 to reach the governments Net Zero target. With so much funding needed to accelerate the rate at which we upgrade our homes, it’s fair to say that the UK Mortgage Industry has an opportunity to play a significant role here.

If we put UK greenhouse gas emission contributions into a league table, household emissions would be top, with energy in at second place, manufacturing third and a close fourth would be transport and storage[2]. To put that another way, according to research done by the National Housing Federation, in England our ‘leaky homes’ produce more carbon emissions than all of the cars on our roads put together[3].

Is New Build the answer? Not really (unusual thing for me to say I know, but bear with me here), New Build absolutely plays a significant role in building the homes our country needs, and energy efficient ones at that, however if you’re reading this as a mortgage professional who doesn’t advise on New Build property, I assure you, ‘Green’ will not pass you by! 4 in 5 of all the properties that will be available to live in in 2050 have already been built. This provides a great opportunity for Mortgage Advisors to be speaking with their existing customers about how they could improve the energy performance of their properties, lenders, including us at Skipton, have a range of Additional Borrowing products available for green home improvements. ?

Ok, so this is all interesting (at least, for my sake I really hope so!) however how does this actually impact the conversations that mortgage advisors are having with their customers? I think it’s a fair assumption that most people are more likely to know the energy performance of their fridge than of their homes. ‘What’s all the fuss about green mortgages, my customers just want the best deal’ I hear you cry! ‘What even is a green mortgage?’ Don’t worry, I’m not going to skirt over the obvious here – my honest opinion is that as an industry I think we are still getting to the bottom of that. We are seeing a mixture of real innovation here combined with bells and whistles while we try to get the balance right. The big thing to be excited about is there is movement, and we are all united in our ambition for mortgages to save the world (ok perhaps not in those exact words), united in our ambition to support the governments legally binding Net Zero by 2050 target – not as catchy, more factually accurate!?We are beginning to see data emerge about what role energy performance plays in home buying decisions and with the cost of living rising, in particular energy bills, if not for the ethical purpose, perhaps for the pocket friendly one, might we begin to see a sharper shift there?

Mortgage Advisors are at the forefront of this conversation, and while it might not seem like the most natural thing to ask a prospective buyer ‘would you be put off by the property being connected to a gas supply?’ I suspect it won’t be too long before we're all factoring such things into our research. Our role as lenders is to continue to innovate, utilise data to build products and resources needed to advise on them easily and to provide the information advisors need in order research them at their fingertips. As I look out toward our green future, I know that at Skipton we will have our eyes sharply focused on how to make that as easy for you, and your customers, as possible.

Rachael Hunnisett | National Accounts & New Build Lead | Skipton Building Society for Intermediaries (all views are my own)

FOR INTERMEDIARY USE ONLY

Sources

[1] Green Finance Institute launches Green Mortgage hub

[2]https://www.ons.gov.uk/economy/environmentalaccounts/bulletins/ukenvironmentalaccounts/2021#greenhouse-gas-emissions

[3] https://www.housing.org.uk/news-and-blogs/news/englands-leaky-homes-greater-threat-to-climate-than-cars/?