Incentivising borrowers to make a greener property purchase is the latest plan from Nationwide Building Society, which has set aside £1bn to help borrowers buy energy-efficient properties.
The lender is planning to launch a range of “green” mortgages with preferential interest rates for borrowers buying new-build properties with an ‘A’ rated energy performance certificate.
Nationwide’s chief executive Joe Garner said: “Nationwide Building Society’s core social purpose is to help people into a place fit to call home. There is now also an urgent imperative to reduce carbon emissions from those homes.
“On behalf of our members, we are calling for government, housebuilders and lenders to work together to make a significant contribution to achieving a net-zero carbon footprint.”
Green loans for older homes
The lender has also pledged to offer loans up to £25,000 with a starting interest rate of just 1% for the first two years to homeowners wanting to retrofit their homes with energy-efficient measures.
In addition to improving their own “environmentally aware” credentials, Nationwide has called on the government to consider reforming Council Tax to encourage homeowners to make their homes greener. It is also urging ministers to reform the Help to Buy scheme to incentivise housebuilders to make properties more energy efficient.
Joe Garner added: “Our suggested reforms are about creating meaningful incentives for people to green their homes. It’s not about penalising those in society who are least able to pay or putting the burden on local authorities. This is the greatest mutual challenge we face, and we will only make a difference if we work together.”
Working together for climate change
The Green Finance Institute has welcomed Nationwide’s plan to incentivise borrowers to consider the energy efficiency of their homes with innovative financial products.
Dr Rhian-Mari Thomas, CEO of the Green Finance Institute, commented: “Developing the market for financing net-zero carbon and climate-resilient homes is a key objective of the Green Finance Institute’s Coalition for the Energy Efficiency of Buildings.”
“Nationwide is one of more than 40 members of our Coalition which spans the UK government, private sector and civil society working collaboratively to launch scalable financial solutions during the course of this year, building on market insights and consumer research that are due to be released over the next few months.”