Mortgage Advice Bureau (MAB) has formed a coalition of mortgage brokers and lenders urging the government to reform stamp duty to encourage energy efficiency and stimulate the housing market.
The group, made up of MAB, TSB, Leeds Building Society and Coventry Building Society, has written to the Chancellor ahead of the Budget “to express [its] concern about the pace of progress towards the decarbonisation of UK housing stock”.
Mortgage Brain, the Association of Mortgage Intermediaries (AMI), Paragon Bank, The Mortgage Lender (TML), Aldermore Bank, Fluent Money, The Brightstar Group and Home Funding also signed the letter.
The firms proposed the introduction of a stamp duty refund for homebuyers who upgrade their properties to reach an Energy Performance Certificate (EPC) rating of C or higher.
They said this change would make energy-efficient upgrades more affordable and support the UK’s net zero goals. The firms also said this would create momentum in the housing sector.
The coalition said a full or partial refund would make energy-inefficient homes more attractive to buyers and help to improve the overall quality of the UK’s housing stock.
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The firms said despite the previous government setting a goal for most homes to achieve an EPC rating of C or higher by 2035, 60% of the UK’s housing was still “below this standard”.
MAB said 16 million properties in England and Wales would require retrofitting to meet this target.
The letter stated: “Any meaningful reduction in national emissions must include a robust strategy to decarbonise the buildings sector.
“Given the scale of this challenge, potential and existing homeowners will require far greater support and incentivisation than what is currently being offered through existing lender schemes.”
It added that while proposals to make rental homes more sustainable by 2030 were “positive”, it said these upgrades would be “substantial, potentially exceeding previous cost caps for landlords”.
The letter said: “Careful consideration must be given to how these costs are managed, preventing undue financial burdens from being passed onto tenants via increased rents.”
Ben Thompson (pictured), deputy CEO of MAB, said: “We’re writing to the government as we want to collectively work together alongside the industry to accelerate the improvement of energy efficiency in the UK’s housing stock. This will not only benefit homeowners and renters by reducing their energy bills and carbon footprint, but also contribute to a more sustainable and resilient economy.
“A more energy-efficient housing market can stimulate investment in green technologies, create jobs, and reduce our reliance on fossil fuels further. We urge the Chancellor of the Exchequer to consider these stamp duty reforms to help achieve both economic and environmental goals.”
