Nationwide Building Society is chairing a study on mortgage lending to homebuyers of energy efficient homes to influence affordability calculations and borrowing limits across the industry.
The study from the LENDERS project (Levering Economics for New Drivers to Energy Reduction & Sustainability) is looking at whether buyers could access larger mortgages by saving money on fuel.
It aims to accurately estimate domestic fuel costs and look at how Energy Performance Certificates, required on every home, could be used to assess fuel costs and help mortgagors borrow more.
LENDERS comprises of Principality Building Society, UK Green Building Council, Constructing Excellence in Wales, BRE, Energy Saving Trust, Arup and University College London.
Andrew Baddeley-Chappell, head of mortgage policy at Nationwide, said: “Against a background of rising house prices and energy bills, the new survey provides an opportunity to scrutinise energy efficiency and its potential to influence property choices and lending practices.
“Depending on the outcome of the survey, the results could show lenders across the industry that smaller fuel costs allow more to be borrowed on the mortgage and might encourage buyers towards more efficient homes.”
The results of the study will be published later in the year, while the society has unveiled a consumer survey which will collect data for the next two months.
Nationwide is currently the only UK high street lender to offer preferential borrowing terms to those undertaking energy efficient improvements.
The society’s Green Further Advance allows existing mortgage customers to borrow between £5,000 and £20,000 to install approved energy efficiency measures such as cavity wall insulation, rated boiler installation and solar panels.
Customers can then get a 0.25% reduction on the society’s range of 2-year fixes and tracker advance products.