More UK lenders offer green mortgages, research suggests

Six in ten think green mortgages will become a permanent part of their future product range

More UK lenders offer green mortgages, research suggests

More mortgage lenders now offer green mortgage deals, increasing the availability of green mortgages in the UK and indicating a growing trend in the market, new data from Mortgage Advice Bureau has revealed.

The research, which surveyed major mortgage lenders, indicates that 57%, now provide green mortgage options – a 4% increase from the previous year’s figures.

Almost six in 10 lenders, or 59%, anticipate that green or energy efficient mortgages will become a permanent fixture in their future product offerings. A more assertive stance is taken by 12% of lenders who believe that green mortgages will eventually replace traditional mortgages entirely.

Despite this shift towards green mortgages, a vast majority of lenders, at 84%, foresee these environment-friendly options coexisting alongside traditional mortgages, rather than replacing them outright.

While green mortgages are gaining traction, the study highlights that a significant portion of lenders, at 61%, perceives minimal change in the sector over the past year. Additionally, 24% of lenders are uncertain about any significant developments, while only 14% believe there has been noticeable progress in the green mortgage space.

Amid a challenging year for both lenders and borrowers, the findings suggest that some lenders are prioritising other challenges over the adoption of green mortgages. For 39% of lenders, expanding mortgage products to cater to diverse borrower needs is a top priority, while 16% emphasise addressing affordability challenges in traditional mortgages to support a broader range of borrowers. Another 14% focus on managing the ongoing effects of interest rate fluctuations.

“Climate change is an issue we all must act on, and the uptick in green mortgage products on the market is encouraging news,” commented Ben Thompson (pictured), deputy chief executive of Mortgage Advice Bureau. “It’s important that this shift stays front of mind for both the industry and property owners, as energy bills and what we can do on an individual level to reduce our climate impact stays firmly in the spotlight.

“While the country’s net zero targets may seem far away, the reality is that we’re hurtling towards them at a startling rate. At a policy and industry level, we have a responsibility to push the housing market to a more sustainable future – one that is as energy efficient as possible.

“Green mortgage products (and the wider promotion of these) is one part of the puzzle, and now we must ensure these are being put to prospective buyers.”

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