It will factor in energy cost savings on mortgage applications for most energy-efficient new builds
Leeds Building Society has enhanced its affordability assessment for mortgages on new build homes with an EPC rating of A or B by using more detailed data about projected fuel bill savings.
This will benefit buyers of greener homes as enhanced affordability will enable customers to borrow more than on an equivalent, less energy efficient property.
“Through purchasing energy-efficient new build homes, customers are not only helping the environment but realising the benefit of lower fuel bills at a time when everyone is affected by the rising cost-of-living,” Martese Carton (pictured), director of mortgage distribution at Leeds Building Society, said.
“Our improved affordability assessment for this type of property demonstrates the potential savings on energy bills where properties are ‘A’ or ‘B’ EPC-rated, and what this can mean to a household’s outgoings, such as mortgage repayments.”
Carton said this is the first step for Leeds in refining its affordability assessments, as the lender seeks to make greater use of this kind of detailed data to bring homeownership to more people while continuing to lend responsibly.
Read more: Leeds BS launches first green BTL deals.
Adrian MacDiarmid, head of mortgages at developer Barratt Homes, welcomed the move by Leeds.
“New homes are built to high energy efficient standards, so it makes sense that the savings on bills are reflected in affordability. We put great store in this with 99% of the homes we build either ‘A’ or ‘B’ rated,” MacDiarmid said. “There is an increasingly compelling case for lenders to offer support in this way to the growing number of customers who want to buy an energy efficient home.”
Leeds said this latest improvement is part of the building society’s efforts to develop new ways to support its members in reducing their carbon footprint.
Last year, Leeds introduced green mortgage deals offering preferential rates and cashback deals for the most energy-efficient homes, aiming to link its products with positive environmental impact.
The mutual was also the first UK lender to offer a carbon neutral mortgage, where it offset the forecast environmental impact of each home during the initial fixed term of the mortgage. This benefit was offered on a trial basis on all its 95% LTV mortgages for purchase, regardless of EPC rating.
