Rachael Hunnisett
Associate Director, Built Environment at the Green Finance Institute
With climate impacts like colder winters, hotter summers and rising flood risks, existing and future homes must be resilient to diverse weather events. They should also aid the UK in meeting net zero and energy efficiency targets.
Delivering a resilient, net zero future for property is estimated by the Climate Change Committee to be a £250 billion investment opportunity.
What does this look like?
In practice, this means that new homes need to be built with this in mind. The Future Homes and Buildings Standard, which requires new homes to produce 75–80% less carbon than the emissions from homes delivered under previous regulations, is critical to delivering this.
Alongside this, the 29 million homes in the UK (with almost all requiring some form of home improvement to meet the UK Government’s net zero target) need the right support to make sure that their homes are warm in the winter and cool in the summer.
Retrofitting a home not only improves the property’s energy efficiency, bringing energy costs down — it is also better for the environment and makes homes more comfortable to live in.
There are now over 60 types of green mortgages in the UK, a significant uplift from the three available in 2019.
Making property retrofit happen
One of the principal obstacles to home retrofit is access to finance. However, the market has come a long way in the past few years to create and offer products to enable homeowners to retrofit their property.
For example, there are now over 60 types of green mortgages in the UK, a significant uplift from the three available in 2019. These are mortgages with incentives for moving into an energy-efficient home or retrofitting the property. Similarly, unsecured green loans are a means for homeowners to finance home improvements. Green loans consist of smaller borrowing over a shorter time period than mortgage finance.
Financial products empowering home retrofit
There are also exciting, innovative new financial products that the Green Finance Institute is working to bring to market to empower homeowners to retrofit their homes. Property Linked Finance, for example, could support homeowners by funding up to 100% of the upfront costs of energy efficiency improvements — where the finance is ‘linked’ to the property, rather than the property owner.
The future of property means resilient, affordable, energy-efficient homes; and finance is an important enabler of this vision for the future.