Surge in Green BTL Mortgage Deals

By Bridging Loan Directory 28th March 2022

Green product choice in the buy-to-let sector has risen to its highest level, according to research from BTL mortgage broker Mortgages For Business.

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.

The number of products increased for seven consecutive months, since August 2021 when there were only 118 green BTL mortgages on the market. Green BTL mortgages now make up 15 per cent 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 owner – 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”.

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.

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.

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 per cent 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.”