Higher Lending for Energy-Efficient Properties
Halifax have revised their lending criteria to now include energy performance certificates (EPCs) when calculating the maximum loan amount available to borrowers. The lender highlights that a property’s energy efficiency significantly impacts energy bills and, consequently, disposable income.
Incentives for Energy-Efficient Homes
For properties with the highest energy efficiency ratings, A or B, Halifax will increase the maximum lending amount. These ratings account for approximately 15% of all homes with D being the most common. Properties rated C, D, E, or those without a known EPC, will see no changes to their borrowing limits, while those with lower ratings, F or G (about 3% of properties), will face a slight reduction in the maximum loan amount.
For example, a borrower purchasing a property valued at £215,000 could borrow up to £194,000 if the property has a rating of A or B. This decreases to £191,000 if rated at C to E, and £190,000 if rated at F or G.
Shifting Incentives in the Market
Traditionally, lenders have encouraged energy efficiency through reduced mortgage rates or cashback offers. Halifax’s approach of increasing the maximum loan amount adds another dimension to these incentives, encouraging buyers to prioritise energy efficient properties or to invest in upgrading the efficiency of their existing homes.
Supporting Sustainable Housing
Amanda Bryden, Head of Halifax Intermediaries, explained the motivation behind this change: “We know that typically, more energy-efficient homes are cheaper to run. Using energy performance certificate data and energy bill analysis, we’re able to reflect that in mortgage affordability.”
In addition to this initiative, Halifax are further incentivising energy efficient upgrades through their Green Living Rewards scheme, offering up to £2,000 cashback for homeowners investing in improving their property’s energy efficiency.
This policy update underscores the growing emphasis on sustainability in the housing market. As the sector adapts to evolving priorities, it will be interesting to see whether other lenders follow suit by introducing similar initiatives. Such changes could play a pivotal role in driving widespread improvements in energy efficiency, ultimately benefiting homeowners, the housing market, and the environment alike.
Importance of Expert Guidance
Given the ever-changing market conditions, seeking the assistance of a mortgage consultant is more important than ever. With their expertise, you can navigate these fluctuations effectively and find the best possible mortgage options tailored to your needs.
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The information contained within was correct at the time of publication but is subject to change.
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