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Working towards a greener future for you and your mortgage clients

The green agenda has been a major talking point for years and as the UK’s target to be net zero by 2050 draws nearer, this calls for a concerted effort from lenders, mortgage brokers and their clients.

Research from Deloitte found that consumers were more mindful about sustainability in 2022 than the previous year, and this shift in attitude seemed to align with the rising cost of living. This was indicated by a higher proportion of people buying second-hand goods, conserving water and reducing the number of products they purchased.

With the opportunity of saving money being so closely linked to how sustainably one lives, it is no wonder that improving the energy efficiency of a person’s home is a major cost-cutting strategy.

Reducing expenses and protecting the planet are two areas brokers can hinge their advice on when encouraging clients to retrofit their homes.

According to Energy Saving Trust, an uninsulated home loses a quarter of its heat through the roof and 35 per cent through the walls, meaning a tenant is more likely to keep the heating on for longer, leading to greater energy use and higher bills. Considering the carbon emitted from homes makes up around a fifth of the UK’s emissions, it is up to us all to work towards reducing this.

Seeking finance

Guiding homeowners towards the means to make their homes efficient is as important as informing them of the benefits.

Many lenders now offer some form of a green mortgage, which typically rewards borrowers for making sustainable improvements with cashback or offers a lower rate for buying an energy-efficient efficient property. More traditional forms of finance such as a standard loan or a further advance on a mortgage can also be accessed to pay for retrofitting.

More recently, the government announced an insulation scheme which will offer households a grant to pay towards green upgrades. This will launch in Spring 2023.

Partnering with charities and organisations

The same research from Deloitte suggested that 37 per cent of people intentionally selected brands that had ethical practices and values in 2022, a seven per cent jump year on year.

This means that the advice process should not only centre around what homeowners can do but also the values and operations of the person or brand providing this service. 

It can be quite difficult for firms to know where to start when looking at how much energy their operations produce and how to reduce that but doing nothing could lead to the loss of an ecologically minded client.

Some strategies may include minimising the reliance on printed documents or cutting down on the time spent travelling, an easy win considering the increased shift to remote working following the pandemic.

However, if a firm aims to be net zero then no matter how minimal its carbon footprint is, there will still be an impact from electronic activities. 

For example, the average carbon footprint of a short email is 0.3g of CO2, while an hour long Zoom call with the camera on can omit 150 to 1,000 grams of CO2.

To offset this, broker firms can consider partnering with charities and organisations which offer to plant trees to counteract emissions or fund projects which promote sustainability.

There is also the option to work with others in the industry who have the same goal.

The Openwork Partnership

Last year, HSBC UK teamed up with The Openwork Partnership to talk about the green agenda at all of their UK broker events. A number of key areas were covered off, including EPCs, what the proposals are for government legislation, the challenges we all face, consumer knowledge and the benefits of getting on board.

The Openwork Partnership also talked about the emergence of green mortgages, the impact on homeowners and landlords, and looked at what lenders can offer to help inspire brokers to start speaking with clients about this.

HSBC UK has also been working with the Association of Mortgage Intermediaries (AMI) Mortgage Climate Action Group alongside other lenders, networks, clubs and brokers, on how best we can tackle the climate challenge within our industry.

Look out for the Green Finance Institute Broker Handbook, which will be available shortly on their website www.greenfinanceinstitute.co.uk as well as the Mortgage Climate Action Group’s website www.greenmortgageadvice.uk.

The responsibility of being green is not down to one part of the mortgage sector, everyone has a part to play. Mortgage brokers and lenders can work together to assist their customers in making greener choices by leaning on the wealth of resources and help available.

Therefore, it is important for all parties to be well-informed to ensure the right decisions are being made and the UK’s goal is reached.