The Green Finance Institute, with Lloyds and NatWest, advocates for new Property Linked Finance mechanism
The Green Finance Institute (GFI), in partnership with Lloyds Banking Group and NatWest Group, has released a report advocating for a new green finance mechanism, Property Linked Finance (PLF), aimed at mobilising billions of pounds of private investment for sustainable retrofitting across the UK.
The GFI report outlines foundational principles and steps for launching PLF in England and Wales, calling for government-backed legislation and pilot programmes, initially focused on the commercial sector.
The GFI estimates that PLF could channel between £52 billion and £70 billion in private funds to decarbonise the UK’s residential market, supporting the country’s net zero targets and addressing the energy inefficiencies of buildings, which contribute 23% of the UK’s total greenhouse gas emissions.
The report, A Greenprint for Property Linked Finance in the UK, highlights that £360 billion will be required to fully decarbonise both commercial and residential buildings in the UK by 2050 — a sum that cannot be met by public funding alone. PLF is seen as a critical tool to attract private capital for energy efficiency, low-carbon technologies, and climate-resilience upgrades.
Under the PLF model, financing is attached to the property itself, allowing repayment obligations to transfer to new owners if the property is sold. This approach would benefit both residential and commercial property owners by enabling affordable, long-term financing for green upgrades without requiring immediate repayment from the current owner.
A similar financing model in the US, known as Property Assessed Clean Energy (PACE), has facilitated over $16 billion in private investment for energy-efficient improvements in more than 371,000 properties, according to the US-based trade group PACENation.
Eloise Henderson-Day (pictured), PLF programme director at the Green Finance Institute, said that the institute’s vision is to build a robust market to fund the decarbonisation of UK buildings. She emphasised the need for collaboration across sectors, including financial institutions, policymakers, local authorities, and property owners, to support the growth of PLF.
“By working together, we can create a flexible and widely adopted PLF market in the UK and beyond, driving the transition to a more sustainable future,” she said.
“Exploring innovative solutions to increase investment and interest in energy efficiency initiatives is a positive step forward in helping the country meet its 2030 goals,” added Andrew Asaam, homes director of consumer lending at Lloyds Banking Group. “However, there is still much work to do, and it will take the ecosystem working together to ensure ambitions are realised.”
Lloyd Cochrane, head of mortgages at NatWest Group, also endorsed the proposal, highlighting the role of PLF in attracting private investment for decarbonisation efforts.
“The investment required to meet UK decarbonisation targets can’t be met by just one part of industry or government, so working like this to outline the opportunities and challenges that need to be addressed to make alternative funding concepts a reality is really important,” Cochrane said.
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