A new project, entitled LENDERS, is looking to demonstrate that more specific fuel cost estimations utilised in mortgage lending decisions could lead to homes with lower energy to be allowed larger value mortgages.
The project is made up from mortgage lenders, building industry specialists, green energy groups and other bodies.
Chaired by Nationwide Building Society, the scheme is presently searching for ways to move away from current ways of estimating energy costs for mortgage purposes.
The group is currently collating data in order to process more accurate information on energy fees and how they lead into the mortgage lending process.
LENDERS stated, ‘this helps support responsible lending, it also means due to lower fuel bills, lower energy homes will have lower other unavoidable costs and can therefore afford to repay higher mortgage repayment amounts without increasing their overall outgoings. This, in turn, leads to the capacity to deliver high capital lending amounts.’
Project to provide more accurate energy estimates
Continuing, the statement says, ‘The larger mortgages available for lower energy homes are hoped to stimulate an awareness in consumers of the benefits of buying a greener home and, longer term, this increase in demand should help drive (via values and speed of sales) the housing market and house builders to provide more energy efficient homes and increase the value of such homes.’
‘It may also help encourage homeowners to invest in improving energy efficiency building solutions by enabling the mortgage market to more accurately reflect fuel costs in lending offers. This could be useful for re-mortgages to undertake energy refurbishment projects, where the realised savings in fuel costs enable the additional mortgage repayments.’