Nationwide Steps Up To Provide Cheaper Loans For Greener Homes
13 Feb 2020
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- Nationwide Building Society has created a £1 billion pool to provide loans and financing to borrowers who are willing to invest in homes that are more energy-efficient.
- Existing homeowners also qualify for loans up to £25,000, if they are willing to make renovations that would make their homes greener.
- The move is meant to incentivize investment in greener homes, with the aim of achieving a net-zero emission from homes in the future.
According to reports, the Nationwide Building Society
is promoting the adoption of green energy in households by helping borrowers invest in properties that are more energy efficient. It is also making loans available to existing homeowners who are interested in making eco-friendly transformations into their home. Reportedly, Nationwide has specified an amount of £1 billion for this purpose. These ‘green’ mortgages would carry a preferential interest rate to encourage investment in greener properties by borrowers. In order to qualify, properties need to be newly built and also carry an energy performance certificate with an ‘A’ rating. For those who already own properties, Nationwide plans to offer loan amounts of up to £25,000 that would reportedly carry an interest rate of only 1% during the initial two years of the loan. These loans would be made available to existing homeowners who are willing to make renovations to their homes and make them more energy-efficient. Joe Garner, who is the Chief Executive of Nationwide Building Society, has also asked the government to reevaluate the Council Tax as, according to him, it would offer further encouragement to homeowners to invest in greener homes. Garner has also emphasized that ministers should evaluate the possibility of incentivizing homebuilders to invest in more energy-efficient homes as part of the already-existing Help to Buy scheme. According to Garner, the purpose of Nationwide Building Society is to help people find a suitable home for themselves, and now that mission also includes reducing the carbon emissions that come out of these homes. Garner has said that all stakeholders, including the government, homebuilders, as well as lenders, need to take initiative and aspire towards the common goal of eliminating the carbon footprint of homes. Garner is hopeful that this £1 billion financing would be effective in incentivizing people to have greener homes. Making net-zero carbon homes that are also climate-resilient is also one of the core objectives as laid out under the Coalition for the Energy Efficiency of Buildings
by the Green Finance Institute, according to its CEO Dr. Rhian-Mari Thomas. Thomas has welcomed the move by Nationwide, which is among the 40 members that are part of the abovementioned Coalition. Other members belong to the government and private sectors as well as civil society. The Coalition is a collaborative that aims to develop innovating financial solutions that are scalable and create a net benefit for society.