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Government launches ‘risky’ plan to link EPCs to mortgage lending

NAEA boss Mark Hayward says proposals to make lenders put EPCs at heart of their lending would endanger housing market.

Nigel Lewis


Estate agents have reacted with caution to government proposals that would incentivise mortgage lenders to include EPCs in their lending decisions.

The Department for Business, Energy and Industry Strategy (BEIS) wants to force lenders to reveal how green their mortgage portfolios are and, as a result, ‘support them to improve the average energy efficiency of the properties they finance’, the consultation document says.

In practice, this means the government hopes to shame lenders into ensuring the homes they grant mortgages for meet minimum EPC standards and persuade them to offer ‘green mortgages’ to reward compliant home owners.

“We need to be careful however to not financially penalise those seeking to sell their homes,” says Mark Hayward, Chief Executive of NAEA Propertymark (left).

“If lenders change their lending criteria to take into account EPCs there could be unintended consequences, ultimately making older homes harder to sell.”

The consultation document also suggests that the current requirement for all sales properties advertised by agents to have an EPC will be much more heavily policed in the future as the government uses EPCs as a key tool to reach its 2030 carbon neutral targets.

EPCs are already a feature of the buy-to-let mortgage market; mortgage lenders are currently required to ensure properties they lend against have reached at least an ‘E’ rating.

The consultation was published at the same time Boris Johnson announced the government’s Green Homes Grant it to be extended by a year to give landlords and home owners 12 months more to complete their upgrade projects.

Read the consultation in full.
Read more about EPC regulation.

November 19, 2020


  1. HMG has a time horizon of December 2023, the latest date for the next election.

    Do not expect any joined up thinking from politicians of any political stripe.

  2. I’m all for making homes ( that Has to be ALL homes, not just focusing upon and penalising just the PRS, again ) more energy efficient.
    Caution is needed in not going at too fast a pace.

    Its only this year that the requirement for All privately rented ( only ) property to be of E grade and Govt is now talking of going up to C grade in another 5 years.
    One has to wonder how much more energy efficient PRS property would be if the Tax allowance on energy efficiency wasn’t removed by Govt back in 2014

    Shows a lack of co-ordination and forward planning by Govt in regard to Housing.
    Tax allowances for ALL energy efficiency improvement should be reinstated, as well as subject to a cap on spending of Less, that £10 k

    The Technology for energy efficiency is improving, but not as fast as the Govt targets for energy efficiency to be achieved at a proportionate cost.
    Better to fund more development and get more affective and financially efficient improvements 3 – 5 years later.

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