Landlords around the country may have heaved a sigh of relief after the Prime Minister Rishi Sunak cancelled the government's energy performance certificate (EPC) targets for the private rented sector - but the mortgage industry is now calling for a policy U-turn.
The Mortgage Advice Bureau has revealed the views of the mortgage sector on the government's decision to scrap the EPC rules which would have seen landlords making their properties more energy efficient.
However, there would have been a substantial number of landlords paying large sums of money to meet an EPC minimum certificate target of C - a target that was only set for the PRS and not all homes in the UK.
'Encourage landlords to upgrade their homes'
Ben Thompson, the deputy CEO of Mortgage Advice Bureau, said: "The UK has some of the oldest and least efficient homes in Europe, so the government's decision to scrap the plans to encourage landlords to upgrade their homes is not going to help the situation.
"However, we also need to consider the landlords' perspective and work together, where the government uses incentives rather than penalties to promote green changes.
"For instance, one possible incentive could be to refund the Stamp Duty Land Tax (SDLT) once a property has been retrofitted."
He added: “We have to face the fact that the UK needs to improve its ageing housing stock.
"With energy bills rising, EPC ratings are becoming more important for buyers, and if we want to meet the net zero targets, we need to retrofit properties.
"Green mortgages are one piece of the puzzle, and we need to make sure that they are accessible and appealing to buyers."
Concerned about the impact of the Prime Minister's decision
The survey, which involved some of the UK's biggest mortgage lenders and advisers, showed that the mortgage sector is concerned about the impact of the Prime Minister's decision on the environment and the housing market.
The survey also focused on the topic of green mortgages, which are loans that reward borrowers for making their homes eco-friendly.
According to the research, nearly half (49%) of mortgage lenders and a third (32%) of advisers would like the government to reverse the EPC relaxation, either by the current or a new government.
The mortgage sector was also asked what needs to be done to boost the uptake of green mortgages.
The most common answer among lenders was to raise public awareness and education on the benefits of green mortgages (31%).
Interest rates and incentives for green mortgages
However, advisers said that offering more attractive interest rates and incentives for green mortgages was the key (25%).
Both lenders and advisers agreed that pushing for government policies and incentives for green mortgages was crucial (29% and 22%, respectively).
The survey also reveals that lenders think that the best way for the government to achieve more energy efficient homes is through collaboration between builders and lenders (82%).
Only 18% of lenders said that builders alone should bear the responsibility.
'Making UK homes more energy efficient'
Mr Thompson said: "Climate change is a serious issue that we all need to address, and we all have a role to play in making UK homes more energy efficient.
"As a sector, we have a duty to push the housing market towards a more sustainable future, where homes are as energy efficient as possible."
He adds: "It is surprising that 82% of lenders think that builders and lenders are the best way to achieve this, as there should be cross-industry cooperation and involvement of intermediaries, who can also play a big part in the transition to a greener future."
'Making the PRS meet minimum EPC ratings'
The managing director of Accommodation for Students, Simon Thompson, said: "Making the PRS meet minimum EPC ratings is a controversial subject - for lots of reasons.
"Landlords were faced with big bills to bring their properties up to a minimum of C without any financial help.
"That meant lots of landlords opted to sell up rather than spend huge sums."
He added: "Landlords with energy efficient homes can access cheaper 'green' mortgages but more needs to be done for the sector if organisations believe the PRS should have minimum EPC ratings.
"At the very least, there should be a tax incentive for landlords to invest, but no one can predict what will happen after the General Election.
"Minimum EPC ratings for landlords might be back on the table and we will see more landlords selling up to avoid the big bills - and tenants will lose out in homes to rent."
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