Energy-efficient homes must be promoted without creating mortgage prisoners
Building Societies Association (BSA) chief executive Robin Fieth (pictured) said property professionals must be careful in navigating the route towards net zero to avoid creating new mortgage prisoners.
“I have cautioned our regulators on a number of occasions to take steps around climate change stress testing and regulation very sensitively. To be wary that when regulators whisper, large parts of the regulated market jump. The only question is how high,” he said.
Speaking at the Building Societies Annual Conference in Liverpool, Fieth shared his thoughts on several challenges and opportunities that lie ahead for building societies and credit unions, including those relating to climate change and Net Zero 2050.
“Do we green our own balance sheets by restricting new lending to homes and properties that achieve the magic, if flawed, EPC A to C rating?” he asked. “Or do we invest in the UK’s overall just transition to net zero by working with households to reduce their carbon emissions? Do we in fact put the greatest emphasis and direct the greatest effort to supporting those living in the oldest and the energy-leakiest properties?”
Fieth stressed that while the government needs to take the big steps to deliver on its commitment to reach net zero emissions by 2050, the private sector needs “to take lots and lots of small steps to help the transition happen as fairly, as cost effectively, and as smoothly as possible.”
“Collectively, in partnership with government and both prudential and conduct regulators, it is beholden on us all to seek to navigate this route such that we do encourage householders and landlords to invest in clean energy and greater energy efficiency,” he said. “And that we do all we can to avoid creating swathes of new mortgage prisoners, trapped in energy inefficient homes that are falling in value.
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“Let’s recognise that there is no clear right answer to net zero transition. Some paths will be more optimal, some less so. Some technologies will be intermediate, some more enduring. Honesty here is critical to allaying fears about conduct and mis-selling minefields, drawing the clear distinction between the practices and behaviours of rogue firms designed to rip customers off, and products and solutions sold in good faith which might, with the benefit of hindsight, prove to be sub-optimal.”
