We are seeing an increasing trend of lenders offering a “green” version of their buy to let finance product offerings. This is via discounts to both set up fees and in some cases an increase in the amount a lender is willing to lend.
Generally, a “Green” buy to let mortgage is available for clients who have properties with Energy performance certificates rated at between A & C.
The number of lenders offering a “green” finance option has jumped massively in the last year, with over 350 products now on offer. We believe that this represents approximately 15% of all the buy to let mortgage products currently available .
Today, for example. Shawbrook have announced that they will offer clients with qualifying properties a partial refund, of up to 0.6% on their arrangement fee. Meanwhile, many others such as Paragon are offering a discount on their interest rates or additional “cash back” offers.
The latest figures suggest that nearly a quarter of landlords have properties with EPCs rated D or below. This is often because a lot of the sector is made up of older housing stock, which tends to be much less energy efficient than new-builds.
Given probable changes to legislation in the next few years, it is worth landlords looking at how they make their properties more energy efficient. From 2025, it is possible that minimum EPC ratings might be lifted to C or higher (current minimum allowed is “E”). So it is worth anticipating these changes and thinking about investing now. At least one can benefit from the surge in green mortgage options as some recompense?