More green mortgage innovation is needed as broker confidence around EPCs grows – MAB’s Gerdes

More green mortgage innovation is needed as broker confidence around EPCs grows – MAB’s Gerdes



As Mortgage Advice Bureau (MAB) concludes the pilot of its Resilient Homes initiative, Karina Gerdes talks to Mortgage Solutions about the findings from its latest research on broker engagement with energy-efficiency client discussions and the innovation she wants to see next from mortgage lenders.

As the head of Resilient Homes – the network’s initiative enabling advisers and business partners to offer services to improve the sustainability of homes – Gerdes (pictured) is working closely with brokers to understand their needs, supply training and help them gain confidence in this emerging area.

And the findings of its latest broker survey reveal that she’s making ground.

Some 91% of advisers recently surveyed said they felt comfortable talking about Energy Performance Certificate (EPC) ratings with their customers, while more than 90% said EPC ratings had been discussed with borrowers in the last 12 months.

Meanwhile, 86% acknowledged that they play a critical role in educating consumers about green mortgages and EPC ratings.

When the initiative was first launched in June 2024, Gerdes recalls a broker telling her that borrowers never spoke to them about EPCs and they did not see the connection between EPCs and their borrower’s budget.


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She said: “The two are absolutely related and that’s the education journey we need to go on.

“From a broker’s perspective, by framing it that the EPC actually directly impacts your financial health in terms of your outgoings each month, then that provides the legitimacy for the broker to broach the subject and get a bit deeper into the topic with the customer.”

 

Green mortgage choice needs to improve

Some 10% of brokers want to see a wider range of green mortgage products developed that should be tailored to different needs and budgets. After all, questions around mortgage products, eligibility criteria and the benefits of using mortgages to fund retrofitting were the most frequently asked questions posed by borrowers.

Gerdes says that while there have been improvements in green mortgages, she wants to see more from lenders.

She said: “The things we’d love to see are pre-approved mortgage ceilings. If a borrower is borrowing somewhere in the middle of their loan-to-value [LTV] bracket, why don’t lenders pre-approve a loan amount to the top of that bracket so the money is there if the customer does want to retrofit the property and, as long as the relevant documents have been provided, the money can be released relatively hassle-free?”

Gerdes also wants to see more use of tiered rate reductions. An EPC rating is based on the number of Standard Assessment Procedure (SAP) points a property receives following its assessment.

Instead of offering borrowers a lower rate if they improve their home by an entire EPC band, Gerdes wants to see more lenders reduce the mortgage rate incrementally based on improvements to SAP points following work that’s been carried out to a home to boost its energy efficiency, even if the property remains in the same EPC band.

 

How brokers can make money from energy-efficiency discussions with clients

MAB’s brokers have been asking their borrowers to confirm their EPC rating for almost 12 months to satisfy the growing number of lenders asking for this information. But, more recently, this has been built out into a wider conversation about all the aspects that can affect their financial health.

The new processes don’t just hold financial benefits for the borrowers either, says Gerdes. There are revenue-generating opportunities for brokers too.

“If the client feels that the potential for saving money warrants taking out a higher mortgage, for instance, there are higher proc fees associated [with] that, simply because the loan value increases.

“And brokers should not underestimate the impact that these conversations have on retention,” she added.

Borrowers who have a reason to come back to their broker because they’re interested in finding out how they can save money by becoming more energy efficient are less likely to go directly to their lender for a product transfer.

Referring borrowers to approved retrofitting partners can also generate referral revenue.

 

MAB’s 2025 greener homes focus

A call to Chancellor Rachel Reeves to offer a stamp duty refund to homebuyers who retrofit their properties to achieve a higher EPC, while acknowledged by Reeves and supported by the mortgage industry, did not get picked up.

The lack of government action, however, has not slowed the network down in its mission to improve the efficiency of housing stock.

MAB has entered the ‘embedding’ phase of Resilient Homes following the conclusion of its pilot, which identified improvement opportunities among the network and gaps in consumer knowledge. Once the required changes have been made to get its AR network up to speed, MAB will start to push Resilient Homes out directly to consumers to educate the public on the financial benefits of energy efficiency.

“We’ll be looking at how we can help customers make small change[s], and in the bigger scheme of things, we want to help customers improve the energy efficiency of those properties on a larger scale,” said Gerdes.





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