"When Rome is burning you do not drop a penny at the Trevi Fountain and pray"
There has been a significant push toward energy efficiency and reduced carbon emissions in recent times. The UK government has set a target to achieve net zero greenhouse gas emissions by 2050, and all rental properties have until 2028 to have reached the minimum Energy Performance Certificate (EPC) rating of ‘C’.
With housing stock responsible for 21% of the country’s carbon emissions, according to the Energy Saving Trust, the reasoning behind this emerging trend is clear.
However, many brokers believe the government’s push toward upgrading properties is out of touch, as many homeowners are struggling financially at present.
When Rome is burning
Kundan Bhaduri (pictured), property developer and portfolio landlord at The Kushman Group, said when “Rome is burning you do not drop a penny at the Trevi Fountain and pray”.
“Frankly, most landlords are worried about making ends meet, being able to pay their next mortgage bill, making sure their tenant is paying the rent on time, and being able to save up enough to pay an unfair amount of tax on their small business turnover, which often times is more penalising than rewarding in this day and age,” he said.
Improving EPC ratings, Bhaduri said, are a vanity that most small landlords can ill afford at this present time. Meanwhile, mortgage lenders, Bhaduri added, are simply emulating the government's desire and paying lip service rather than driving any significant change this year.
The timeframe the government has put in place to meet the new EPC regulations, he said, is unrealistic and the deadline will most certainly need to be kicked in the long grass.
“We need a long-term strategic vision to achieving net zero goals without hindering day to day business,” Bhaduri said.
Worrying about tomorrow another day
Darryl Dhoffer, mortgage expert at The Mortgage Expert, said clients are aware of climate change and the need to do something.
“However, when I mention the government’s initiative of net zero emissions by 2050, their faces drop and they ask how much is it going to cost,” he said.
Dhoffer said clients are struggling to put food on the table and keep a roof over their head, let alone making changes to their homes to entertain a greener mortgage.
In order for these mortgages to work, he said there needs to be more energy efficient affordable homes built to the correct standards, and the government financially helping existing homeowners that do not have suitably energy efficient homes.
Let us not forget, Dhoffer said, there are homes out there that will never be energy efficient based on the age and design of the property, no matter how much money is thrown at them.
“So, even though we all know it is important, green mortgages appear, on paper at least, a tick box exercise,” he said.
Justin Moy, managing director at EHF Mortgages, said there are a few lenders who offer reduced fees and rates through green products, but the savings are nowhere near enough to make a difference in the current financial climate.
As such, Moy agreed with Dhoffer that spending large sums of money on property purely for green reasons is not going to be high on most borrowers’ agenda at the moment.
“When families are struggling to pay for food, fuel and household costs, the last thing they will worry about is saving £20 per month on their mortgage by paying out £5,000 for an energy efficient upgrade,” he said.
For the next few years, Moy said it is going to be about surviving for today, and worrying about tomorrow another day.
Do you believe the green agenda needs to be put on hold for the time being? Let us know in the comment section below.
