Just over three months after implementing a pre-remortgage retrofit referral system, Matt Coulson, director of Heron Financial, has already begun to see the commercial benefits of prompting energy-efficiency conversations with clients.
“I really think 2025 will be a turning point for green mortgages,” says Coulson (pictured) as he prepares to send his team of mortgage brokers off to sit their Certificate in Green Mortgages training.
Coulson is an advocate for encouraging conversations about how homeowners can improve their property’s energy efficiency. But it isn’t just because he feels we have an ethical responsibility to fight climate change; he also sees the commercial opportunity in striking up a partnership with a reputable retrofit firm and finding new ways to add value to the remortgage journey.
Mortgage Solutions sat down with Coulson to find out more.
When do you first speak to mortgage borrowers about improving energy efficiency?
Around nine months before their mortgage product is due to expire, we contact our clients to ask them what their Energy Performance Certificate (EPC) rating is and if they know about things they can do to improve it.
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Broadly, the consumer sentiment has been positive. You don’t get everybody falling off their seat to say, “where do I sign?”, but what we’ve absolutely seen is a pause for thought with clients who hadn’t considered it to that point and now they have.
How do homeowners find out more about retrofit options?
We’re partnered with Effective Home, a provider of retrofit services such as solar products, insulation, ground source heat pumps and batteries and more technical solutions. If our clients are interested in finding out more about improving energy efficiency, that’s where we refer them to.
Your advisers aren’t energy-efficiency experts. What do they say to clients during these initial chats?
The initial conversation nine months out from the client’s remortgage is made by one of our support team who handle the relationships, not the mortgage adviser. It’s very much a ‘did you know?’ type of conversation. Questions like: “Are you aware of what your EPC is?” and “Do you know how to find that information and do you know what it means?” Then we signpost people to freely available information on the internet.
And if they have high energy bills, we ask if they would like to find out if there’s anything they can do about them.
If it’s something they’ve been thinking about, we explain we have a partnership with Effective Home, which is one of the UK’s leading advice firms for these types of services, and if they’re interested in finding out more, we can make the introduction.
We don’t step into what the most appropriate actions might be. All we’re doing is highlighting that there might be some possibilities for you and you might be eligible for some grant funding.
How long before you follow up with clients?
Our remortgage advisers call clients again about 6-7 months before their rate is due to end. By that time, they’ve either been in touch with Effective Home because we’ve made that introduction, or they’ve gone off and done some research themselves into the retrofit arena and are more armed with the information they might need.
For us, that creates a much broader conversation at the point of remortgaging.
How has your team responded to the new process?
There was probably a little bit of hesitation at the start. It’s been a journey as far as education is concerned. We’ve lent on the lenders quite a bit to get education on their own green ranges. Our network has been really helpful, and our advisers are just about to sit the Certificate in Green Mortgages exam. We’ve really focused on giving them the tools that give them the confidence to have the conversations.
When they start to see the results, when they see that client who may or may not have returned pushing the agenda, and being the one who is driving the application process at the point of remortgage, it becomes a self-fulfilling prophecy. They want to do more because it’s generating revenue and business for them.
Have you found that the initial EPC chat has added value to your mortgage service?
Yes. We’ve all got used to, as an industry, the idea of product transfers leading the conversation. They’re more convenient for the client, and lenders for a period were offering product transfers a long time before rates expired, which was not the norm.
Now that’s been scaled back and there is a trend for lenders to contact borrowers three and four months out for product transfers. If we’re having a conversation with a client at six months and they’re now interested in solar panels, for example, or a ground source heat pump, because they’ve gone off and done the research or because we made the introduction, it almost creates a remortgage opportunity where perhaps there wasn’t one before.
Even if they don’t go down the route of working with Effective Home and instead they make an arrangement themselves, we have become the spark of the conversation, the point that generated the interest. It’s become really fruitful, and some clients have referred their friends to not just to get a remortgage but to get some education about what they may be able to do in terms of retrofit.
The fact that we’ve been able to have a conversation with the client, very early on, about something that’s new and interesting that they wouldn’t have associated with their mortgage broker has created business for us.
To find out more about how brokers can generate revenue from getting involved with energy-efficiency conversations, read Mortgage Solutions’ interview with Karina Gerdes, head of Resilient Homes at Mortgage Advice Bureau (MAB) – the network’s initiative enabling advisers and business partners to offer services to improve the sustainability of homes.
