Last month, the environment was at the forefront of the news agenda as government officials and corporations met in Dubai for COP28.
The conference may be over, and recent changes in the market around rates will be drawing much attention and focus, but it is still vital we keep up action to tackle climate change.
Housing, after all, has a critical role to play in the journey towards net zero. Responsible for a substantial 21% of the country’s carbon emissions, Britain’s housing stock requires significant investment to improve energy efficiency and reduce its impact on the environment.
Here are the key actions we advocate to steer the housing sector towards a greener future this year and beyond.
Setting a clear path ahead
Proposals for new requirements around Energy Performance Certificates (EPC) on rental properties have been put on hold, eliciting mixed reactions within the landlord community.
Some have greeted it with a sense of relief, but others will be frustrated after already investing funds to upgrade their portfolio.
According to Coventry for intermediaries’ report, ‘Beyond the Bricks: what does the green housing market really look like?’, landlords have already invested an average of £9,419 in energy efficiency improvements.
While postponing any changes may offer some reprieve, it presents a unique opportunity for landlords and homeowners to adopt a more measured approach to energy efficiency upgrades.
These borrowers, however, will need continued support from lenders and brokers, who will be vital in helping them get the information and guidance they need to make well-informed decisions about any property upgrades.
At the same time, we cannot assume EPC changes will be put on hold for the long term. With Rishi Sunak anticipating a general election in the second half of this year, the potential for similar policies to emerge when the two main parties outline their commitments to tackling climate change is significant.
A crucial lesson learned from the confusion surrounding the initial EPC proposals in 2021 is the need for a detailed roadmap from the next Government.
Clear communication is imperative to outline the specifics and timelines of any ambitious policies aimed at elevating Britain’s housing stock to a better standard of energy efficiency.
Levelling up green initiatives
A clear pathway for the housing sector will be critical, but actioning real change to improve energy efficiency ratings will require financial support from government and innovation in the mortgage market.
This year, we must see improved government support to encourage consumers to ‘turn the dial’ on their EPC ratings.
An innovative approach could involve utilising Stamp Duty as a mechanism to incentivise improvements, offering a rebate to those who enhance their property’s EPC.
A more ambitious step could entail a thorough review of EPC ratings themselves to ensure they align with evolving environmental standards.
The mortgage market, too, has a role to play. Last year witnessed a growing number of lenders introducing green mortgages and incentive schemes, but we believe there is more that can be done.
It is imperative to continue expanding the green mortgage market and diversify product options for customers. This will be an area of focus for Coventry in 2024, aligning with our environmental commitments as a B Corp and contributing to the creation of a more sustainable market.
Ensuring new buyers receive adequate advice
Consumers are switching on to the importance of energy efficient housing.
Nearly all (91%) of the homeowners surveyed in our Beyond the Bricks report thought sustainability and energy efficiency are important.
This highlights a substantial opportunity for brokers to enhance their support for green initiatives this year.
As the vanguard of the homebuying journey, they must play a proactive role in guiding borrowers toward environmentally friendly solutions.
This is particularly important with younger buyers – our research found that 98% of homeowners aged 18 to 34 would make green changes to their properties if they had the option to.
Last year was the warmest on record, and so far in 2024 we’ve already witnessed the effects of climate change, with intense flooding costing the UK around £1.4bn each year in damages.
Clearly, there is an urgent need for collective action to combat climate change and housing, as a major emitter of carbon, must play a central role in achieving net zero.
This year, collaboration among the government, lenders, brokers, and consumers must be a priority to drive tangible progress toward a greener housing sector that benefits both our communities and the planet.
Jonathan Stinton is head of intermediary relationships at Coventry for intermediaries
