In good news for green campaigners (and for tenant’s bank accounts), 62% of landlords are interested in so-called Green Buy to Let Mortgages (over 3 in every 5). This is according to a recent study. The survey asked three hundred landlords across the UK, based in all areas.

Interest in investing has never been higher in mortgages designed to reward borrowers with a series of discounts depending on energy efficiency steps to improve properties.

Too Many Homes Still Energy Inefficient

The UK has been slow to improve energy efficiency with far too many low on the EPC scale. This means not only higher greenhouse gas emissions, contributing to our global output, but also higher bills for renters. At a time when energy prices are set to skyrocket (in February 2022), we need to do more. Proactively preparing for a climate changed future is part of that.

How Do Green Mortgages Work?

Green mortgages are simple. When a property owner takes one out, they may then implement energy efficiency upgrades to the home. Once the new EPC rating is assessed and confirmed, borrowers the mortgage lender will apply a discount to the mortgage interest rate or give cashback.

There are many different types, but the most substantial and recognisable work this way – assessing once an upgrade is made.

Part of this rush to improvements now is believed to be because the new EPC ratings come in effective 2028. Rewards for improving your properties include

More Survey Details

The figures revealed some interesting trends:

•          No owners who acquired such property prior to 2000 were interested in green mortgages at the time of purchase
•          Just 10% of those queried who purchased properties in the noughties said green mortgages interested them
•          By age groups, the trends are unexpected. Those under 45 are less interested in green BTLs (but still an impressive 50%) while among the 45 age group that rises to 66%

This can only grow as more lenders start to add mortgage services with a range of green rewards. The UK housing market has been notoriously slow to take them up, but that is now changing.

Now, some of country’s biggest lenders are getting onboard after early interest elsewhere. However, some still only offer better rates for those buying existing property with good energy performance. Little has historically been available to encourage improvement.

Students and Energy Efficiency

With prices set to increase dramatically through 2022, it’s important to improve your student BTL EPC rating. There is no clear path to how prices might stabilise and for students living on a tight budget, things are about to get harder. With a higher EPC, your property will become more attractive to students in the coming years.