The Green Finance Institute (GFI), in partnership with the Green Mortgage Advice Initiative (GMAI), has launched the Green Home Finance Roadmap (GHFR) for the Mortgage Industry: a blueprint for embedding sustainability across the UK mortgage market in collaboration with non-financial stakeholders.
Decarbonising the UK’s homes is one of the biggest financial and logistical challenges of the net zero transition. The UK’s Climate Change Committee estimates reaching net zero in residential property alone by 2050 will require an estimated £311.5 billion capital investment – most of which is expected to come from the private sector.
The UK’s mortgage market – worth £242 billion a year, with nearly £1.7 trillion in outstanding lending – plays a crucial role in deploying this investment.
34 organisations and industry bodies from the finance, energy and built environment sectors have so far pledged their support for the actions in the roadmap, including the National Retrofit Hub, the UK Green Building Council, the Building Societies Association, the Intermediary Mortgage Lenders Association, the Association of Mortgage Intermediaries, and the Equity Release Council.
Upcoming research from the GFI found that half of all homeowners and 8 in 10 first-time buyers in Scotland would use a green mortgage to help them buy or upgrade to a greener home.
But to meet this growing demand and mobilise the capital needed to meet national targets, the GFI says individual lenders and intermediaries cannot act in isolation.
The GFI added: "The clean energy transition is a citizens’ challenge: public engagement and access to financial products are crucial to driving widespread adoption of clean technologies. At the same time, there’s rising awareness in the industry that building resilience – such as safeguarding homes from flooding and extreme weather – must go hand in hand with decarbonisation. Both challenges call for collective action."
Drawing on the outcomes of the London Green Mortgage Summit and the Scottish Green Home Finance Summit, the GHFR is built on insights from industry voices, from mortgage lenders and brokers to retrofit experts and policy specialists.
Chloe Timperley, green mortgage campaign lead at the GFI, commented: We’re proud to launch the Green Home Finance Roadmap as an essential tool for channeling more of the £242 billion a year mortgage market towards future-proofing the nation’s homes. Developed through industry consultation, the Roadmap gives us a means to track progress, celebrate collective wins, and identify new priorities and areas of unmet need over time. It sets out a shared vision to help us move forward as an industry – and crucially, helps us avoid circling the same conversations or working in silos.”
Stephanie Charman, chief executive of the Association of Mortgage Intermediaries (AMI), said: “Around 9 in 10 mortgages are now transacted via brokers, which puts mortgage intermediaries on the front line of the green transition; helping homeowners access the right support and guidance to make their homes more sustainable. The Roadmap sets out what needs to happen if we want to make green finance part of everyday advice. AMI is delighted to see so many broker firms supporting this document, and we will continue to ensure the advice sector remains at the forefront of this important issue.”
Richard Merrett, managing director of Alexander Hall and chair of the Green Mortgage Advice Initiative (GMAI), added: “The Roadmap is a timely and much-needed resource for both lenders and intermediaries. It brings clarity, direction and momentum to a complex and fast-moving space. From the start we have championed a ’country not club’” approach to the green agenda, and this document embodies that ethos of collective action. We’re proud to support this initiative and will continue to champion the role of the mortgage industry in tackling the climate crisis.”
