The Bartlett


Lending power

Homebuyers could borrow more if they could accurately forecast their energy bills.

View from rooftop terrace across cityscape

A report published in July 2017 has found that, if mortgage lenders used Energy Performance Certificates (EPCs) to assess home energy bills, maximum mortgage lending could vary by up to £11,500 between the most energy-efficient properties and those that consume the most energy. 

Part-funded by Innovate UK and involving a consortium of industry experts, including UCL Energy Institute researchers Ian Hamilton, Peter Mallaburn and Gesche Huebner, the LENDERS project successfully modelled the link between energy efficiency and household fuel bills. By creating a new consumer calculator they were able to demonstrate to would-be buyers the cost benefits of fuel efficiency: it could improve their mortgage affordability assessment, potentially enabling them to access a larger loan.     

The LENDERS project, which included the analysis of 40,000 sets of property data, also suggests that the same change in forecasting could release thousands of pounds for those undertaking energy refurbishments.  

“Mortgage lenders can play an important role in increasing the value of energy performance and improving the quality of EPC data to help drive increased investment in energy efficiency in UK housing,” says Ian Hamilton, Reader at the UCL Energy Institute. “I can envision a time when lenders will offer mortgages with an additional amount to invest in increasing the home energy efficiency because that will reduce energy bills, freeing more funds to pay back the loan.”