Taking the first step onto the property ladder is a huge milestone and often the biggest financial decision younger generations will have made so far, with the energy efficiency of their future home often left overlooked.
Despite recent signals that energy bills will soon start to fall, costs remain a significant proportion of household expenditure. Young people in particular are also leading concerns about the impact our energy usage has on the environment.
But while first-time buyers are – and indeed should be – interested in making their future homes more energy efficient, most are unaware of how to do so or what they should be looking for when viewing properties. So it’s no surprise that more and more young, prospective buyers are asking energy efficiency-related questions during the mortgage advice process.
Now more than ever, brokers have an increasingly important role to play in helping to bridge this awareness gap to help bring down energy costs and tackle the climate crisis.
Conveying the benefits
According to recent insights from Lloyds Banking Group, despite being both interested in, and concerned by climate change, 1 in 5 (20%) younger buyers don’t know the EPC rating of their home.
Furthermore, a third (31%) said they aren’t confident they know what they need to do to make their home net zero ready by 2035, and 18% said they didn’t know what the term ‘net zero ready’ means despite having heard it before.
The buying stage of the client lifecycle is a key point in the house-purchasing process where energy efficiency should be discussed as part of conversations with mortgage brokers — from both a climate and financial perspective.
It’s at this point in the process that prospective buyers can discuss the different energy efficiency measures available to them. These can range from buying a house that’s already fitted with energy saving upgrades, to talking to their broker about how they can retrofit measures – such as solar panels and heat pumps – in their new home.
Brokers have a pivotal role to play in ensuring first-time buyers have unbiased, accurate information from a range of trusted sources to help guide them through the process, whether they’re ready to invest in their first property or are just weighing up their options.
Bridging the awareness gap
According to our insights, while 60% of 18–34-year-olds think it’s important to make their current or future property ‘net zero ready’ by 2035, only 41% are confident they know what they’d need to do to ensure their property is ‘net zero ready’.
Once again, mortgage brokers have an important part to play in signposting younger clients to various resources and independent bodies, such as the Energy Saving Trust and Octopus Energy, to bridge information deficits.
These organisations can help young people to understand how they can access and learn more about EPC ratings and why they’re so significant in the retrofitting process in the first place.
Our polling shows that one of the biggest barriers to retrofitting for young buyers is cost. Half (50%) of 18–34-year-olds stated that overall cost was the top barrier preventing them from making green home improvements over the last five years, with 41% citing up-front costs as the biggest factor.
Brokers can speak to their clients about the various financing options available – including government grants and partnerships – and the lower-cost options they can consider. This includes discussing energy efficiency alternatives that are available to both current and prospective homeowners, such as home energy saving tools that look at your current energy usage and what can be done to reduce it.
Greening our homes
Brokers are important players when it comes to advocating for and educating younger clients on sustainable housing and the options available.
There are many positive impacts of green home initiatives — for both the environment and homeowner finances. It’s essential that brokers realise the responsibility they have to educate the next generation of homeowners, ensuring that young buyers have the knowledge they need to play their part in helping to make Britain’s housing stock net zero ready.
Esther Dijkstra is managing director, intermediaries at Lloyds Banking Group
