What do landlords need to know about the new green mortgages that have been released for the buy-to-let sector?
Many people want to adjust their daily habits to have a lower environmental impact, and banks are doing their part by attempting to provide answers to these problems.
The number of green mortgages has recently increased, implying that there are now more possibilities to pick from.
Landlords are being pushed to enhance the energy efficiency of their properties due to speculation about imminent changes to EPC criteria. As a result, these green mortgages may be beneficial in the long run.
Here at Preview My Property, we explain what landlords may expect from a new variety of environmentally friendly mortgages.eviewmy
What is a green mortgage?
Green mortgages offer buyers of energy-efficient homes incentives and beneficial terms. Examples of this could include cashback, a lower rate of interest, or an increased loan amount by the bank.
Because numerous features that make a home ecologically friendly, such as good insulation, heat pumps, and energy-efficient lighting, are often already entrenched in new projects, homes that qualify for green mortgages are likely to be new builds.
Those with older homes that don’t have high EPC ratings, on the other hand, could make a commitment to reducing their home’s environmental effect.
The lender will compensate landlords for making a property greener or purchasing a green home.
EPC ratings are used to determine whether or not a home is eligible for a green mortgage. The better the band rating, the more probable the bank is to provide you with the products.
Why should these be considered by landlords?
Because of the emphasis on environmentally friendly homes, there is a huge push towards green financing. Eco-related mortgages now account for 15% of all buy-to-let (BTL) products on the market, according to new estimates.
Because of the long-term benefits, banks are backing the push for green home purchases. These types of residences are more likely to command higher asking prices, and there is increasing demand for green properties.
Tenants are looking for alternate methods to make ends meet as interest rates rise and the cost of living rises. Green homes often have lower energy expenses, which may make it easier for tenants to keep up with their mortgage payments.
Landlords should take advantage of the incentives green mortgages provide as the drive to enhance their EPC ratings grows.
An increase in the variety of Green Mortgages
Overall, the number of green mortgages accessible has increased significantly. There are currently 353 green BTL mortgage packages available, according to the broker Mortgages for Business. There were only 118 green BTL mortgages on the market in August 2021.
Some UK lenders, such as Barclays and Natwest, have created products that reward borrowers who take out a green mortgage.
As part of the application procedure, eligibility checks are required. We recommend that landlords compare products and spend time researching them to verify that they are the best fit for them.
Landlords who want to enhance their property should expect to pay up to £15,0000 on average. As a result, using green mortgages on the market could assist landlords in funding these renovations.
It’s never been more crucial for a landlord to provide a green house for his or her tenants.
Preview my property can assist landlords all around the UK in achieving a higher EPC rating.