The UK Green Building Council (UK-GBC) has joined with mortgage lenders, building industry experts and sustainability bodies to start a research project into building a stronger link between energy costs, affordability and mortgage borrowing.
Marking the start of the UN Conference on Climate Change in Paris (COP 21), the LENDERS project will investigate the increased use of the Energy Performance Certificate (EPC) required on every home for sale.
It will test the use of EPC data in estimating energy costs for individual homes and look at the potential to incorporate that estimate into the mortgage affordability calculation.
Supported and part funded by Innovate UK, the research will draw on the expertise of diverse groups with green credentials – including Nationwide Building Society, Principality Building Society, Zero Carbon Hub, Constructing Excellence in Wales, BRE, Energy Saving Trust, Arup and University College London.
UK-GBC chief executive Julie Hirigoyen said: “With energy bills representing one of the biggest costs that households face, it seems common sense for lenders to take them into account when assessing mortgage affordability.
“But despite this helping to reduce lending risks and encourage retrofit, it has so far failed to become mainstream practice with banks and building societies.”
The LENDERS project follows two reports into construction, lending and energy efficiency.
In August 2015, UK-GBC published a report in partnership with UCL examining the role of energy bill modelling in mortgage calculations, while in 2014 BRE Wales and the Wales Low/Zero Carbon Hub investigated the link between EPCs and energy bills.
Now a wider group is expanding on this earlier research to create a larger study into the feasibility of influencing property choices and lending practices through energy efficiency.