If you were to ask any homeowner whether they would like cheaper energy bills both now, and in the future, then I think we could all guess what the answer would be.
And yet, what we find is that the ways and means by which they can achieve greater energy-efficiency and therefore cheaper bills, has not been forthcoming for the vast majority of homeowners over the course of the last year or so.
However, that could (and should) be hopefully about to change with one lender at least – Nationwide Building Society – having woken up to the fact homeowners want cheaper bills, but they need the financial means to be able to make the changes that will deliver them.
In a way, it’s not quite believable that we have taken so long to get to this point, but Nationwide’s 0% green additional borrowing product for its existing borrowers, offers them the opportunity, and incentive, to secure between £5k and £15k in order to carry out that work.
And, it’s only available via advisers – again a recognition that advice is vital and necessary in this space, and it also gives us a further touchpoint with our clients who might fit the bill.
It really is about time, not least because of the high bills homeowners have had to cope with over the last year, but also because of the benefits it can provide in terms of hitting net zero by the Government’s target date.
What many won’t realise is that the average carbon emitted from an average home in the UK is more than that emitted by the average car. The big focus should be on our homes because they are the biggest ‘culprits’ here, and we might finally have a product that other lenders can follow which delivers the improvements required.
If more lenders aren’t looking at this type of offering, I’m not sure what they are looking at. This has to be about incentives to existing homeowners to improve their houses, and again thank goodness, there’s a recognition here that this is not all about heat pumps or other expensive installations.
This money can be used to buy a more efficient boiler, or get better double-glazing, or could simply be used to improve the insulation in a home, a big source of heat loss. It’s about starting small and building up the efficiencies, and through this we can ensure the EPC is improved and those bills come down.
Again, from a pure lending perspective, it seems like a no-brainer. In an environment where the margins on business are tight, where they are all facing significant competition, and where purchase activity has fallen, this can be the opportunity to lend more money and secure greater levels of business. Plus, they need to improve the EPC levels of the properties they hold on their lending books.
And, it’s not even absolutely necessary that this additional borrowing has to come with a 0% rate as Nationwide have laudably done here; it may be at a lower rate but they may wish to charge a rate, plus it could also come with perhaps deals with large scale DIY businesses or others, in order that customers also get a discount on what they need to carry out the work.
It feels like an open goal, and we would be flabbergasted if lenders were not seriously considering this, and spending a significant amount of marketing and advertising budget to promote such an offering.
Homeowners want to do this. They want to do it now and, at the same time, futureproof their homes for whatever unforeseen circumstances might be coming next, which could send energy costs soaring again.
It’s all there for lenders to achieve and market to. Nationwide have led the way brilliantly – let’s see other lenders follow that lead.
Rory Joseph is director and Sebastian Murphy is head of mortgage finance at JLM Mortgage Services, the mortgage and protection network