Estate agents warn owners of older homes, rural houses and listed properties could struggle to sell under green mortgage plans

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  • Boris Johnson reveals his plan to green Britain by 2050
  • Plans include proposals to make housing stock green
  • Lenders to disclose energy performance of properties in plans

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Homeowners living in old, rural and even listed properties run the risk of being unable to sell if strict green finance targets are introduced, warn property agents.

The warning comes after Boris Johnson this week unveiled his plan to green Britain by 2050, with mortgage lenders setting energy performance targets for the properties in their portfolios.

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A body that represents property agents across the UK claimed that the measures could result in a distorted property market and that the UK’s historic housing stock should be taken into account.

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Boris Johnson unveils proposals to green the housing stock this week

Propertymark’s Timothy Douglas said: ‘Encouraging green improvements to properties through loans runs the risk of trapping homeowners with older properties, those who live in rural areas, listed buildings or conservation areas, causing their Homes become difficult to sell and hence the value goes down. ‘

Propertymark said occupants of older properties could be left with homes they could not sell if buyers were unable to secure finances on them because of their low energy efficiency.

The impact would be more likely to be felt by less wealthy owners, as buyers with deep pockets would be more able to bypass mortgage restrictions and higher-end older homes would remain desirable.

Mr Douglas said: ‘Using targets can distort the market and lead lenders to preferential, new homes to improve the ratings of their portfolios.

‘Preventing a substantial portion of the housing stock from entering the market could create havoc for home buying and selling as well as the broader economy.’

He added that improving the energy efficiency of homes should be dependent on consumer choice and not with all the implications applied by mortgage lenders, it may be necessary.

He said: ‘We would be concerned if lenders raise rates and limit products because fundamentally, improving the energy performance of a property is dependent on consumer choice and is not a core business of mortgage lenders.’

Mark Harris of mortgage broker SPF Private Clients said: ‘The green agenda is not new, but the momentum behind it is increasing. There are more green mortgage products aimed at those buying more energy-efficient properties – AC rated, and not just from specialist lenders but from high street banks as well.

‘However, there is a real danger that if homeowners are stuck in older homes that can’t move forward because they can’t sell them, then the green initiative could create the next round of hostage prisoners.

‘Without changes or improvements, lenders can restrict lending to low loan-to-values, high pricing, or no lending at all. It can penalize those who are financially unable to adopt or adopt new efficient technologies.’

A UK finance spokesperson said: ‘Greening our housing stock is critical if we are to meet our climate change obligations and banks and finance providers are committed to helping achieve this goal and this Ensure that consumers are not left behind.

ways to increase energy efficiency

PropertyMark recommends three measures to improve the energy efficiency of homes without negatively impacting the housing market.

1. EPC related reforms

These include linking a plan of energy efficiency improvement to recommendations on a property’s energy performance certificate.

According to Propertymark, it could demonstrate the ‘most appropriate route’ to a warm home, regulatory compliance and zero carbon.

2. Tax Break

It also recommends using tax breaks to encourage homeowners to improve energy efficiency.

For example, these might include exempting energy reforms from VAT or offering lower council tax rates for homes that have been made more energy efficient.

3. Adjustable Tax Rates

An adjustable rate of property tax linked to energy performance is also being recommended by PropertyMark.

This can be done in two ways, it suggested. First, by applying the adjustment as a reduction in the more energy-efficient properties. and second by offering buyers a discount if energy efficiency is improved in less efficient properties within a certain time period after purchase.

Propertymark said that by linking energy performance to property taxes, it could help drive sales growth for more energy-efficient properties. In addition, it suggested that improvements become standard for homeowners seeking cost and improve the desirability of their homes.

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