Four out of five (83%) advisers say that their clients have no understanding of green mortgages, according to new research from Mortgage Advice Bureau.
More than this, almost two thirds (63%) of advisers say their clients have not heard of the term ‘green mortgages’ at all, and more concerningly, don’t understand them.
Over the past few years, as the green agenda has intensified, the property industry has still lagged behind, with two thirds of owner-occupied homes having an EPC rating of below C, and 20% of emissions coming from buildings themselves.
Green mortgages are one such way to help incentivise homeowners to boost their property’s EPC rating, yet only 3% of advisers say their clients fully understand what a green mortgage is, and 14% say their clients only partially understand them.
This highlights a very clear need for educational work for consumers to help boost their knowledge and understanding about green mortgages.
Ben Thompson, deputy CEO at Mortgage Advice Bureau, said: “While the country’s Net Zero targets may seem far away, the reality is we are hurtling towards them at a faster rate than many realise.
“We no longer have the luxury of time, and the industry has a lot to do to not only decarbonise homes but increase consumer understanding of green mortgages and EPC ratings.
“Despite the number of green mortgage products coming to market, there is a considerable disconnect between their benefits and the consumer knowledge surrounding them.
“This therefore throws into question their effectiveness.”
Encouragingly, data shows the topic of green mortgages is gradually beginning to come up in adviser-client conversations.
Over 88% of advisers confirmed the topic of green mortgages has come up in conversation in the last 12 months,
Of that though, 84% said the topic was prompted by them, with only 3% saying the topic was prompted by their clients.
Only 30% of advisers say they actively propose green mortgage products, while 23% say green mortgage products are fine in theory, but it’s not always suitable.
Understandably, 63% say that their main objective is to offer the most suitable mortgage product to their client, but this isn’t always a green one, perhaps showing the de-prioritisation of the green agenda.
Describing their attitudes towards recommending green mortgage products to clients, 8% admitted they need to upskill their knowledge and understanding of green mortgages.
The research also questioned advisers on where they think responsibility lies in helping educate consumers about green mortgages and EPC ratings.
Most advisers believe it is the responsibility of mortgage brokers, with 67% saying this.
30% said it is the responsibility of the government and a further 25% said it is the responsibility of the media.
In response to this widespread lack of understanding, as well as advisers’ reluctance to offer greener products, Mortgage Advice Bureau has developed a Green Hub to help educate consumers on the subject of green mortgages and how they can raise their property’s EPC rating in efforts to help reach the UK’s Net Zero goals.
Thompson added: “Earlier this year, Mortgage Advice Bureau compiled a list of commitments in principle for lenders, brokers and advisers to adhere to in order to help raise awareness of green mortgages and their benefits.
“The industry has an important role to play as educators for consumers, and we’ll continue to work with intermediaries to help push the green agenda forward.”
