The government wants to link mortgages to compulsory green improvements to homes, it was reported on Tuesday.
According to The Times, the government wants mortgage lenders to disclose the energy efficiency of the homes they lend for, with targets set to improve the insulation of the buildings in their portfolios.
Energy performance certificates are already required when buying a house, with ratings ranging from A, the highest, to G. But The Times reported that under the new rules, lenders would have to get properties up to a C rating, with potentially mandatory targets if the home building industry fails to improve standards.
The government hopes that the proposal will encourage banks and building societies to lend to homeowners to enable then to carry out green improvements. However, The Times said there were fears that new buyers could find it hard to get a mortgage under the scheme, unless they could commit to spending potentially thousands of pounds on home improvements.
The government, which published its Net Zero Strategy on Tuesday, has announced a slew of green policies recently, ahead of next month’s UN Climate Chance Conference, or Cop26, which the UK is hosting.
Other proposals, published as part of its Heat and Building Strategy, include homeowners being able to apply for a £5,000 grant to install a heat pump in lieu of a traditional gas boiler.
Speaking at the Global Investment Summit in London on Tuesday, prime minister Boris Johnson also announced a £400m partnership with Microsoft co-founder Bill Gates to invest in next generation green technologies, and said industry needed to “deploy trillions” towards tackling climate change.
He added: “The government don’t do it on its own, the taxpayer can’t do it on his or her own. We can deploy billions, perhaps hundreds of billions. But in the end it’s the trillions of the market that will make the difference.”