Government’s Green Finance Strategy could include preferential mortgages
The government has announced a £5mn fund to help the financial sector develop ‘green’ home finance products – such as green mortgages that give customers discounted payment rates once they have upgraded the energy rating of their home.
It has also announced a new £10mn Whole House Retrofit competition to help companies design innovative ways of reducing the cost of retrofitting the UK’s old housing stock. This could include assembling parts of buildings like pre-fabricated roofs off-site and quickly fitting them to homes, minimising disruption for homeowners, says the Department for Business, Energy and Industrial Strategy (BEIS).
The announcements came just days after the government became the first major world economy to pass a law committing the UK to net zero emissions by 2050. Tackling domestic emissions, by improving the efficiency of the 17mn homes in the UK with an Energy Performance Certificate below Band ‘C’, will be essential to achieving this, says BEIS. Homes are currently responsible for 15% of the UK’s carbon emissions.
The initiatives are part of a new Green Finance Strategy from the government, with funding awarded to projects that incentivise energy efficiency retrofitting through the Green Home Finance Innovation Fund (GHFIF). This will support the development of products like equity loans and home improvement loans that help homeowners make domestic upgrades – for example offering energy efficiency advice, access to trusted installers and preferential mortgage interest rates.
London must lead the way in securing a greener, more resilient and sustainable future for the UK, said City Minister John Glen at the launch of the Green Finance Strategy. As the world looks to shift to clean, resilient and sustainable economic growth, there is an opportunity to make the capital the hub for green investment.
The strategy sets out plans to increase investment in sustainable projects and infrastructure, while ensuring the UK remains an international leader in decarbonisation. It will also build on findings from the Task Force on Climate-related Financial Disclosures, which includes setting expectations for publicly listed companies to disclose by 2022 how climate change risk impacts their activities.