Mortgage lenders will have to double their rate of energy efficiency improvement to deliver new 2030 targets proposed by the government, suggests geospatial technology company Kamma.
In a new report, Kamma highlights that a set of new policies from the Department for Business, Energy and Industrial Strategy (BEIS) aim to make lenders significantly more responsible for improving the energy efficiency standards of housing stock across the UK.
Currently, homes account for 22% of the UK’s total greenhouse gas emissions, meaning the sector will have to play a significant role in delivering international and national climate obligations.
The proposed measures include requiring mortgage lenders to regularly disclose the average energy efficiency performance of their books and commit to achieving an average of EPC Band C across their back books.
An EPC rating is awarded based on SAP points, with a Band C rating being given if a property scores 69 SAP points – the average EPC rating has risen by only 3 SAP points in the last 13 years, rising from 61.8 to 64.7 over this period.
Kamma emphasises that in order to deliver the new target and close the gap of 4.3 SAP points to hit Band C, an “eye-watering” investment of £48.3 billion will be required.
The government also hopes to publish a league table of lenders, publically ranking them in terms of their efforts to improve energy efficiency performance.
The report states: “Yet within this challenge there is opportunity: a burgeoning market for green finance products, growing public demand for sustainable housing, and a huge opportunity for brands to showcase their green credentials by acting to reduce the emissions of their customers.
“Those lenders able to get on the front foot and solve the technological challenge of delivering accurate and customisable analysis of energy performance across their mortgage book, will soon be leading the charge towards a greener future.”