The Government plans to cut the cost of fees on green mortgages and house improvements in a bid to encourage households to upgrade the efficiency of their homes, a report has revealed.
The measure forms part of the Government’s Green Finance Strategy, in which a £5 million fund – known as the Green Home Finance Innovation Fund (GHFIF) – has been launched to help the financial sector develop more green home finance products, such as equity loans, home improvement loans and green mortgages.
Under the proposed new plans, homeowners who upgrade – or retrofit – their homes to improve their energy rating could be entitled to discounted mortgages.
As part of this campaign, the Government has also launched a new £10 million innovation fund aimed at companies to design and develop “new ways of reducing the cost of retrofitting the UK’s old housing stock”.
This comes after research revealed that the cost of upgrading older homes is often far more costly and disruptive than any potential savings on bills.
However, the Government hope innovative new solutions, such as assembling parts of buildings like pre-fabricated roofs or facades off-site, could minimise disruption for homeowners.
Commenting on the announcement, Energy and Clean Growth Minister Chris Skidmore said: “To fulfil our world-leading commitment to reach net zero emissions by 2050, we need an overhaul of our housing stock to tackle the disproportionate amount of carbon emissions from buildings.
“By rolling out more green mortgages and reducing the costs of retrofitting older homes we’re encouraging homeowners to improve the efficiency of their homes and save money on their energy bills, helping to ensure everyone has access to a warm and comfortable home.”
Rufus Ballaster, Senior Partner of Carter Lemon Camerons LLP Solicitors, observed “The UK’s commitment to reach net zero emissions by 2050 is a laudable and substantial step which needs action. If the economics of energy efficiency measures were to ‘click’ by a combination of lower costs for improvements and ease of access to capital at a price less than the benefits, we would see a seismic change in attitudes and action. That would be welcome but it is hard to picture how the economics will work currently unless there are subsidies pumped in to reward emission reduction.”