At 353, the total number of green products available in the buy-to-let mortgage sector has now risen to the highest ever recorded and landlord borrowers now have more choice than ever before.
According to the data, the number of green products has been on the rise since August 2021 when there were only 118 green BTL mortgages on the market. Green BTL mortgages now make up 15% of all BTL products on the market.
But Ltd company products saw even greater improvements in the extent of green choice on offer; rising to 244 deals this month. Not only that, but green products currently account for a larger slice of the Ltd company BTL market than ever before - with green products now representing almost 19 per cent of the total.
Gavin Richardson, managing director of BTL broker Mortgages for Business, said: “There are now 353 green BTL products - a level not reached since our records began. Choice totally eclipsed what was on offer this time last spring. It demonstrates not only the recovery in 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 most marked increase was in Ltd company lending, where the number of products has risen by more than fivefold since August last year”.
Richardson said, following the end of the stamp duty holiday which had kept the property market buoyant for much of 2021, providers are now focusing on enticing landlords with greener products, which has been “something of a sideshow” until last year.
Richardson adds: “The government has committed to making Britain carbon-neutral by 2050. Upgrading existing housing stock with energy-efficient improvements and making new-builds even more green can lower the sector’s carbon emissions. Given much of the UK’s ageing housing stock is very energy inefficient, making our homes a major source of greenhouse gas emissions. At 14 per cent of the UK’s total emissions, housing has a greater carbon footprint than the farming industry. So there’s no question that improving energy efficiency is a critical part of tackling climate change."
Just under a quarter of landlords’ properties have an Energy Performance Certificate (EPC) of D or below. The problem of updating properties is exacerbated by older housing stock in the UK (as they are more likely to have poorer EPC ratings and will need more money to improve). Some 36% of properties in the private rented sector were built before 1940.
Proposed regulations state that new tenancies should have an EPC rating of C or above from 2025, and all existing tenancies should get to that rating by 2028. Recent research from Landbay suggests only half (54%) of landlords with one to three properties know about the government’s EPC requirements (although 80% of portfolio landlords with 10 or more properties - and 70 per cent of those with four to 10 properties - were aware of the proposals).
Richardson concludes: “On the other hand, this criticality of meeting the climate change challenge doesn’t make it any easier for landlords. The average bill for landlords looking to improve their property is between £6,000 and £15,0000. When we asked them, only 38% of landlords told us that they could afford to invest in making their BTLs more energy efficient. So mortgage lenders have a huge part to play in helping landlords to fund their efforts - they have a responsibility to provide the facilities to allow landlords to fund this.”
