Green remortgaging to be key area of opportunity for intermediaries in 2022

Brokers expect to see a rise in demand for green remortgaging and believe second-steppers and those looking to move up the housing ladder all offer growth opportunities.

This is what brokers told us in our latest research with them about their forecasts for the year ahead. Brokers cited green remortgages as the product most likely to increase in popularity in 2022, with almost half (47%) predicting a rise in applications.

Residential remortgages came in second place in our poll, with 35% anticipating growth and a third (34%) saying the numbers of first time buyers using affordable housing schemes will go up and 32% expecting increased interest in green mortgages for purchase. Only 11% of the 62 brokers who took part said demand for interest only mortgages will rise. As a Society we regularly carry out surveys, via our Intermediary TalkingPoint Panel, giving brokers a chance to share their views and help us shape future product innovations and criteria improvements.

The findings are certainly interesting and show how attitudes can change. Twelve months ago green mortgages weren’t high on the agenda for many buyers but now brokers are telling us interest in these products is coming from their clients – and they expect demand to continue to grow.

Events like COP26 in Glasgow have put climate change firmly in the spotlight and so consumers are more aware than ever of the impacts of carbon emissions on our environment.

Green mortgages come in different forms, but aim to incentivise homeowners to invest in improving the energy efficiency of their properties or buy a home with an existing sustainability rating. Nine in 10 brokers have told us they feel confident about their knowledge of green mortgages, however, those taking part in another poll of 69 brokers ahead of COP26 felt more needs to be done to raise awareness and provide extra information to both the broker community and consumers.

One broker described the benefits of green mortgages saying: “Great idea to encourage greener homes and increase energy efficiency.” While another said: “Benefits include sustainability of the building and social environment.”

Of course, we’re listening to what brokers are telling us and making efforts to link our products with positive environmental action. In August 2021 we launched our first green mortgages, offering preferential rates or cashback for purchasers of the most energy efficient properties.

In November, we became the first UK lender to add a carbon offset benefit on all of 95% LTV (loan to value) fixed rate mortgages for purchase, and will invest in offsetting* the forecast environmental impact of each home during the initial fixed term of the mortgage. We’ve already received enough applications to offset approximately 4,500 tonnes of carbon – the equivalent of around 15,000,000 car miles (petrol). This is equivalent to 31 trips to the moon and back.

Undoubtedly this is an area that will continue to evolve and grow. But it’s becoming clear that if we want to put home ownership in reach of more people generation after generation, change needs to happen and people will seek out products to help them reach their goals to address climate change.

Martese Carton is head of intermediary distribution at Leeds Building Society