Eco sustainability property

Green finance options to grow and incentivise new-build buyers

Sparked by the climate emergency but spurred on by rising energy bills, the government is supporting green finance for energy efficient homes.

A new fund of up to £20m is being made available to lenders to allow them to develop a greater choice of green finance products to help households reduce their energy bills, as well as their carbon emissions.

Green mortgages have already been on the rise for a number of years, which tend to provide favourable rates or other incentives for borrowers investing in properties with higher energy efficiency ratings, or energy performance certificates (EPCs).

Such options are available to property investors as well as homeowners, depending on the product. They can make the prospect of investing in a new-build or a highly energy efficient home even more enticing, particularly as mortgage rates have risen in recent months.

Green finance to raise the bar

For property investors, newly built properties have a number of benefits, including being more future-proof – particularly taking into account government proposals to increase the minimum EPC ratings of properties in the private rented sector to D or even C in the coming years.

Green finance products which can save money on monthly mortgage costs could therefore be a welcome bonus for such buyers, while homeowners would also benefit from reduced mortgage outgoings alongside cheaper bills.

Minister for Business, Energy and Corporate Responsibility, Lord Callanan, said: “Driving up the energy efficiency of homes won’t only reduce our impact on the climate, but will also help houses stay warmer for longer.

“Green finance products will allow households with greater means to spread costs over time, empowering them to be able to invest in their properties, improving their energy efficiency and resale value.

“Today’s funding will give more companies in the financial sector the opportunity to create and offer these products, and in so doing help households reap the benefits both in the investment to their properties, and in the savings they can make on their energy bills.”

How important is energy efficiency?

Earlier this year, a study by Savills using using EPC and HM Land Registry data found that new-build owners will save a projected £4,900 in energy bills over the next five years, compared with the average older home. This is something many renting tenants, too, will be highly aware of.

Furthermore, properties with an EPC rating of C have been found to sell for 5% more than less energy-efficient ones, and this disparity could be set to increase as the cost of living crisis alongside environmental awareness continue to impact people’s choices.

The government has a broad aim of ensuring that as many homes in England as possible meet EPC band C by 2035, although there is currently no legal minimum for owner-occupied properties. In the private rented sector, the minimum EPC rating is currently E.

According to the Committee on Climate Change, energy use in homes currently accounts for around 14% of UK greenhouse gases, so the green finance announcement is just one of many factors that will aim to boost the country’s housing stock quality and lower emissions.

Professional membership body Propertymark is calling for the government to ensure that any new rules it puts in place are “realistic and achievable”.

It says: “Without providing landlords and homeowners with incentives and access to sustained funding, it is unlikely that energy efficiency targets for the private rented sector and a reduction in emissions across the property sector will be met.

“Decision makers across the UK must move away from a one-size fits all policy and develop energy efficiency proposals and products based on the archetype of a property rather than its tenure.”

Support for lenders to increase their green finance offerings is certainly a step in the right direction, and many investors will hopefully be able to benefit from these products.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:


Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT