The Intermediary –- May 2026 - Flipbook - Page 45
RESIDENTIAL
Opinion
Green mortgages
aren’t delivering
W
hen you start
to find solar
panels down
the middle aisle
of Lidl, you
know saving
money on energy bills is high on the
public’s list of priorities.
If regulations are changed as
expected, for £400, shoppers will soon
be able to buy plug-in solar panels to
put on a balcony or outside space to
power some of their electrical items
from retailers such as Amazon,
Iceland and Lidl.
It might sound like a gimmick, but
my money is on this being the start
of bigger shi in consumer appetite.
People are more likely to embrace
solar if they can start small.
It’s these subtle shis in consumer
behaviour that mortgage lenders need
to take notice of.
If these plug-in panels deliver decent
savings, they give households their
first taste of free energy and are likely
to spark conversations about how
much more could be saved with full
roof-installed solar.
Add to this proposals to allow
tenants to plug these solar panels
into the sockets of rental properties
and you create a new generation
of households that expect solar
technology in the home.
We all worry about climate change,
but let’s be honest, it’s soaring
energy bills that are driving interest
in renewables.
Bills are set to rise again this
summer and families are tired of
losing control of their household
budgets through no fault of their own.
I listen in envy when my partner’s
parents – early adopters of solar –
talk about their zero energy bills and
making money by selling excess power
back to the grid.
Whatever the motivation, growing
interest in solar is good news for the
new-build market.
Many homes already come with
solar panels, but from 2028 every
new-build will be required to have
solar panels covering at least 40%
of the property’s ground floor area,
alongside a heat pump.
There are mixed views on who
will foot the bill, but it usually lands
with the consumer. According to the
government’s Future Homes impact
assessment, the additional cost could
range could be up to £5,000 – an
estimate that sounds conservative to
say the least.
Increased support
In a low-interest-rate environment,
a £5,000 solar premium on top of
the usual new-build premium may
feel manageable. But in a highinterest-rate economy like today’s,
it could easily price buyers out. If
borrowers can buy a similar-sized
second-hand property with a lower
Energy Performance Certificate (EPC)
for less money, many will take that
route instead.
That’s why banks and building
societies need to raise their green
mortgage game and work with
housebuilders to promote the longterm savings of buying a more energyefficient home. Green mortgage
discounts are typically a paltry 0.10%.
HELEN PIERSON
is director at Mortgage Advice
Bureau New Homes
On a £300,000 repayment mortgage
over 25 years, that saves around
£17 a month – hardly a compelling
incentive.
The differential needs to be far
more meaningful. What can buyers
really do with £500 cashback, another
common offering?
A discount of at least 0.30%, worth
roughly £50 a month, would give
brokers a genuine chance of selling
the benefits of a more expensive but
cheaper-to-run home.
But brokers and builders need more
support still. Families need clear,
independent, Government-backed
data showing the monthly and annual
savings offered by A and B-rated
homes, how quickly they will recoup
the upfront cost, and what that means
for household finances over time.
Public appetite for solar is growing
fast, driven by necessity. Now the
mortgage market needs to catch up. ●
Green technology is delivering a new era of energy expectations
May 2026 | The Intermediary
43
