How you can make your mortgage go green
Saturday 26 September 2009
While more people are now recycling their waste or shopping ethically, ecological considerations have not made much progress in mortgages. The average lender pays little more than lip service to green issues and, sometimes, not even that.
Green, or "ecological", mortgages are not yet widely available and the credit crunch has further delayed their expansion. But there are some notable players, principally the Ecology Building Society.
In terms of asset size, the Ecology – with £86m of assets at the end of 2008 – is only the 49th largest building society out of 52. However, in terms of ecological considerations, it is certainly doing far better than its peers.
Jon Lee, lending development officer at the Ecology, says: "Properties that the Society will lend on have to meet certain standards of ecological quality, or carry with them a strong case ecologically in terms of planned refurbishment, renovation or conversion.
"It's not just about encouraging efficiency in new build, but also about making the best of the stock of housing we already have by improvements."
There are a variety of ways that a property might be considered eco-friendly, including the use of materials from renewable sources or reclaimed bricks from a demolished property; the installation of solar panels or heat recovery systems to reduce energy and resource usage; and the use of water recycling and non-petrochemical based paints and finishes to minimise pollution.
Some of the other "green mortgage" providers concentrate on offsetting carbon imprints rather than promoting ecologically friendly enhancements to housing.
The Norwich & Peterborough Building Society will plant 40 trees if someone takes out one of its three green mortgages, which comprise two four-year discounted products and, for self-build properties, a five-year fixed rate mortgage.
The Co-operative Bank funds Climate Care projects on behalf of its mortgage customers. These projects, such as the re-forestation of the Kibale National Park in Uganda and the provision of more efficient cooking stoves in Cambodia, are designed to reduce carbon dioxide and help offset the emissions by their mortgage customers. The bank calculates what a fifth of the emissions are for the average property in the UK, and, for each mortgage taken out from its entire range of mortgages, will make a donation offsetting that emission amount.
Beyond that, many banks and building societies have corporate strategies unrelated to their individual products. For example, the Chelsea Building Society reduced its energy consumption by 15 per cent in 2008, which equated to a reduction of 577 tonnes of C02.
For the borrower, one of the downsides facing the more widespread use of green mortgages is the small number of lenders that offer such products. This means the choice available may not always be as competitive in terms of interest rates payable as non-green mortgages. This downside can be minimised, in terms of offsetting carbon imprints, by using the no-fees broker London & Country Mortgages, which will plant 50 trees in Africa for each mortgage taken out through them. The advantage of London & Country is that it can advise on all the mortgages available through intermediaries and this massively expands the choice of mortgages available.
An expansion in the number of providers offering either green or carbon offset mortgages will happen, but the worldwide financial malaise has been responsible for stalling any such growth during the past couple of years. When such financial restrictions ease we are likely to see more providers offering green mortgages. However, without government intervention it is likely to remain a niche area for the immediate future.
David Black is a banking analyst at Defaqto.
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
easyJet founder Sir Stelios Haji-Ioannou aims to make buying a home easier
Life expectancy calculator will allow people to plan ahead but needs to be handled carefully
Simon Read: Facebook and PayPal may be about to cash in as people get more fed up with high-street banks
Make money as a mystery shopper
How to start your own internet business
- 1 Easter egg hunt horror as mother finds dead body under deck of house
- 2 'Natural' energy drink banned for containing erectile dysfunction drug
- 3 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 4 Loch Ness Monster found on Apple Maps?
- 5 Kingdom Tower: Construction of 1km high new world’s tallest building to begin next week in Saudi Arabia
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
Scottish independence: It is the English who should be on their knees, begging the Scots to vote ‘No’
Nigel Farage fatigue? Half of voters ‘immune’ to Ukip’s appeal
'Sinful': Video of British Muslims dancing to Pharrell Williams's hit Happy comes under attack
Nigel Farage: I’m taking on the status quo, and the Establishment’s fighting back
Refugee facing deportation from Sweden saved by fellow passengers refusing to let plane leave
iJobs Money & Business
£150.00 per week: QA Apprenticeships: This company has been providing on site ...
£221.25 per week: QA Apprenticeships: This company is a well established Inter...
£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...
£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...
Day In a Page
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square
A charming four-bedroom house overlooking Burleigh Square Park, close to Thorpe Bay
A three-bedroom farmhouse with a large inglenook fireplace and exposed beams
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds