23 June 2022
Green financing and equity release
Emma Harvey, is an experienced and passionate green finance specialist who joined the Green Finance Institute in 2019. Emma leads the Coalition for the Energy Efficiency of Buildings, an industry-led collaboration with more than 320 individual members, focused on developing new financial products and solutions to help accelerate the decarbonisation of buildings. Emma was a guest speaker on our Green equity release plenary at the Summit.
The finance sector is mobilising to take its place at the climate table and the built environment is one area experiencing significant levels of innovation to help fund rapid decarbonisation.
The UK’s building stock accounts for 23% of national greenhouse gas emissions, and the Climate Change Committee has estimated that £250 billion needs to be invested in UK homes by 2050. Given the significant investment gap to achieve a net-zero built environment, our banks, investors and asset managers are well-placed to play an important role in helping homeowners and landlords access the finance needed to retrofit their properties while generating attractive returns at the same time.
We are already seeing pioneers in property and mortgage finance positioning themselves to both help consumers and embrace the huge opportunities the retrofit revolution offers. Currently, there are more than 30 green mortgage products on the market, and 13 lenders have aligned or committed to aligning one or more of their products to the Green Finance Institute’s Green Home Finance Principles offering a consistent and transparent framework for green products.
While green mortgages are a welcome entry into the market, significant opportunities remain for lenders to pivot other well-established solutions towards environmentally positive outcomes. For example, equity release products could be developed to support individuals aged 65 and over to invest in energy efficiency upgrades in their homes – this not only helps to reduce energy bills and carbon emissions but can also contribute to protecting the long-term value of a property.
Funding the decarbonisation of UK homes represents a £250 billion investment opportunity. Public and private finance will play a significant role in helping homeowners decarbonise – and the early movers and pioneers across the finance landscape will see significant rewards for helping their customers and the planet.
- The views of contributors are not necessarily shared by the Council. This article first appeared in our Equity Release Summit newsletter special, read it here.