Improving home energy performance through lenders – Law Society response

The proposals

The Department for Business, Energy and Industrial Strategy (BEIS) consulted on proposals to improve the energy performance of mortgaged properties and reduce emissions.

The proposals for lenders included:

  • annually disclosing portfolio-wide data for wide energy performance certificates (EPC) and the gross value of lending for energy performance improvement works
  • a self-regulation system, underpinned by voluntary improvement targets

The consultation will also look at:

  • how voluntary targets would allow for market testing of green finance products
  • whether a mandatory target would ensure comparable effort across all lenders 

Our view

We support proposals that could improve the energy performance of mortgaged properties and deliver substantial emissions reductions in line with the UK government’s target of net zero by 2050.

We understand the UK government’s rationale for attempting to encourage lenders to take a more active role in the energy efficiency of the homes against which they lend.

Properties that have a mortgage make up just less than half of the existing housing stock, so we'll be interested to see how this scheme can be rolled out to unmortgaged properties.

We’re keen to learn more about what impact the changes in requirements might have on conveyancing solicitors.

We will be interested to take part in discussions and developments as the policy rolls out both for mortgaged and unmortgaged property.

What this means for solicitors

Although the proposals are not directly aimed at property solicitors, changes to EPC standards and reporting obligations may impact the conveyancing process.

This could lead to changes in lenders’ requirements, particularly for transactions involving buy-to-let purchases.

Next steps

This consultation closed on 12 February 2021.

The government is analysing the feedback.

Read the consultation on the GOV.UK website

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