Green Lending to Improve Home Energy Efficiency

Published / Last Updated on 31/03/2023

The government is consulting with lenders on making owner occupied property and private rental property financing more accessible.

The government has ambitious targets for net zero emissions in the UK and one of the biggest issues is that our housing stock is older when compared to European housing stock after two World Wars meant so much more 1950s and onwards rebuilding whereas the UK has vast swathes of older housing stock, undamaged from wars and therefore having a greater proportion of inefficient insulation and heating systems.

It is much more costly to make older stock more energy efficient with external/internal cladding, no fossil fuel heating and more.  Lenders need to be engaged to help provide sources of capital to fund the costs of improvements as well as encouraging property owners with more attractive ‘green’ mortgages.

Funding will be offered by the government to lenders to test mew ‘green finance’ services with pilot schemes due in 2024.


Despite landlords being criticised for increasing rents, many landlords are battling higher income taxes and capital gains taxes, higher interest payments on mortgages, arrears carrying over from furlough and lockdown as well as Fire Risk Assessments and fire safety improvement costs following Grenfell as well as minimum Energy Performance Certificates (EPC), with a minimum C for new tenants from 2025 and existing tenants from 2028.

By way of example, the directors of Roberts Clark (this website) own some buy to let investments and have already spent £11,000 on three rental properties so far on new insulation, energy efficient heating and new fire doors and alarm systems comply with the new EPC and fire regulations with another £3,000 - £5,000 to follow over the next year.

No wonder private landlords are increasing rents or selling off rental properties meaning there is a rental property shortage as well Social Housing providers already ‘dumping’ old, non-EPC compliant housing stock to avoid the costs of upgrades.

This is all a good thing for long term safety, security and efficiency, but many private owners are struggling to meet financial demand after demand whilst Social Housing and Local Authority Housing managers do very little apart from selling off and reducing supply.

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