'Green' mortgage offers can incentivise energy efficiency in UK homes, says Edwards

Last week, the Welsh government announced a new tool designed to help Welsh 'help-to-buy' loan applicants borrow more money if the house they are buying is energy efficient. Wales’s housing minister Rebecca Evans said that she hoped the move would prompt all mortgage lenders to "make energy efficiency part of the mortgage consideration for all homebuyers in Wales".

Lindsay Edwards of Pinsent Masons, the law firm behind Out-Law.com, welcomed the move and highlighted other progressive policies being implemented in other parts of the world as a sign of the growing attention being given to energy efficiency in properties.

Last month the European Parliament gave its backing to proposed new EU legislation that envisages the renovation of existing buildings with energy-efficiency measures, and the installation of energy-efficient measures into new buildings being constructed.

In the US state of California, new building energy efficiency standards are set to require solar panels to be installed on new properties from 2020.

Edwards said that while the UK has not indicated that it will follow California’s lead in mandating solar panels on new-build properties, the Welsh announcement of energy efficiency loan benefits was an example of the greater focus there has been recently on "incentivising home-owners to improve the energy efficiency of their properties".

"This announcement could be an important step in raising the profile and importance of energy efficiency amongst homeowners," Edwards said. "This focus on energy efficiency is arguably more sensible than moving to compulsory solar panels at this stage: until the UK’s housing stock achieves an acceptable level of energy efficiency the costs of compulsory solar panels may outweigh the benefits."

"Energy efficiency improvements are currently lagging behind other efforts to decarbonise the economy, such as the integration of renewable energy and the development of electric vehicles, but play a crucial role in enabling the UK to achieve its legally-binding targets under the Climate Change Act," she said.