Strong increase in the number of BTL green mortgages

The past year has seen an increase in the number of “green mortgages” offered to rental owners.

Data from broker BTL Mortgages for Business shows that at the start of March this year, 353 green products were now available. This compares to just four products available to owners 12 months prior.

The number of products has grown steadily over the past seven consecutive months and now represents 15% of all BTL products on the market.

Within the BTL sector, particular emphasis has been placed on green agreements with regard to the products of limited liability companies. A total of 244 offers were available for this sector in March, with green products now accounting for 19% of all BTL mortgages from the limited company.

Mortgages for Business managing director Gavin Richardson said: “There are now 353 green BTL products – a level not seen since our registrations began.

“This demonstrates not only the recovery of the BTL sector but also the willingness of lenders to innovate. While there are more green products for individual owners – there are now 312 on the market – the biggest increase has been in lending to limited companies, where the number of products has increased more than fivefold since then. August of last year.

He adds: “The government is committed to making Britain carbon neutral by 2050. Upgrading existing housing stock with energy efficiency upgrades and making new build even greener can reduce carbon emissions from the sector. . He points out that 14% of the UK’s total carbon emissions come from housing – a higher carbon footprint than the farming industry.

However, Richardson adds that the cost of making homes more energy efficient can be costly for homeowners. “The average bill for owners looking to upgrade their property is between £6,000 and £15,000. When asked, only 38% of owners told us they could afford to invest in improving the energy efficiency of their BTLs.

“So mortgage lenders have a huge role to play in helping landlords fund their endeavors – they have a responsibility to provide the facilities for landlords to fund that.”

Just under a quarter of owner properties have an Energy Performance Certificate (EPC) of D or less. The problem of updating properties is exacerbated by the old housing stock in the UK. Some 36% of properties in the private rental sector were built before 1940.

The proposed regulations state that new rentals should have an EPC rating of C or higher from 2025, and all existing rentals should achieve this rating by 2028. Recent Landbay research suggests that only half (54%) of owners with one to three properties know the government’s EPC requirements. However, 80% of portfolio owners, owning 10 or more properties, and 70% of those owning between four and 10 properties were aware of these potential changes.

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