Government Allocates £4.1 Million to 26 Green Finance Projects, Boosting Energy Efficiency in Buildings
The government has confirmed a multi-million-pound funding allocation for 26 green finance projects aimed at enhancing energy efficiency in buildings. Today, £4.1 million of funding has been allocated from the £20 million Green Home Finance Initiative.
The 26 projects that received funding will undergo a 6-month discovery phase to conduct research, development, and testing. Following this phase, they will be eligible to apply for larger government grants ranging from £200,000 to £2 million to expand their pilot programs.
This funding initiative is a welcomed decision by the government, as ministers have been cautioned that current policies will only achieve one-third of the required emissions reductions mandated by law to be accomplished by 2050.
The poor energy efficiency of buildings and the transition to more efficient low-carbon heating in UK housing stock have been identified as areas of concern. The recent energy price crisis has highlighted the severity of the issue and has prompted increased calls for better support for homeowners, landlords, and tenants seeking to improve building energy efficiency.
Mortgages are a key aspect of these projects, including buy-to-let mortgages and equity release. Customers will be incentivized to enhance the energy efficiency of their homes by being offered lower mortgage rates.
British homeowners and landlords who improve the energy efficiency of their properties are set to benefit from lower mortgage rates through new government-backed trials. The current average mortgage rates range from 4% to 5%, making any rate reductions highly favorable to most borrowers.
Here are some specific details:
- Perenna Bank: Awarded £193,350 to introduce a long-term fixed-rate green mortgage that incentivizes retrofitting by offering reduced mortgage rates.
- Aviva Equity Release UK: Provides a service allowing homeowners to access equity in their property through a specialized lifetime mortgage. This will free up cash for improving the energy efficiency of their homes. Awarded £87,612.
- Ahman Bank: Developing a mortgage offer that enables buy-to-let landlords to include the cost of energy improvements in their overall package. The offer is supported by an assessment of the retrofit work required. Received £200,000.
Energy Efficiency and Green Finance Minister Lord Callanan stated that the announced funding supports long-term commitments to energy efficiency, including the goal for all homes to achieve at least Energy Performance Certificate (EPC) level C by 2035. He further added, “We are supporting these organizations in developing fresh and innovative methods to help more people gain better access to energy efficiency measures such as loft insulation, double glazing, and heat pumps.”
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Check out our article on the Great British Insulation Scheme and if it does enough to tackle “leaky” housing stock