Home buyers with the Nationwide are being offered interest-free loans of up to £20,000 to ‘green’ their homes and so cut energy bills.
Customers can borrow to install solar panels, air source heat pumps, window upgrades, new efficient boilers, insulation for cavity walls and share, and even an electric car charging point.
The deal is available to existing customers of the building society and while the money is being loaned interest free customers are required to pay it back over either two or five years.
Studies have shown enormous enthusiasm for home improvements designed to cut energy bills and carbon emissions, however the large upfront cost is a major barrier to getting the work done.
The 0% Green Additional Borrowing products, which need to be spent on improving a property’s energy efficiency, will enable Nationwide mortgage holders to borrow between £5,000 and £20,000 up to a maximum of 90 per cent Loan-to-Value (LTV).
Nationwide was the first major lender to offer green borrowing at 0% in June 20232, with the maximum limit set at £15,000. However, take-up has been very low, with just 1,900 applications completed since launch until the end of September 20243.
It hopes to increase take-up by boosting the maximum loan to £20,000 and by making it easier for customers to borrow by removing a requirement for new customers to wait six months before being eligible to apply.
Britain’s biggest building society has published a new report titled “How low-cost finance supports the greening of UK homes”. It sets out the actions needed to encourage home decarbonisation across the UK.
The organisation said the UK’s 28 million homes are significant contributors to greenhouse gas emissions, accounting for approximately 15 percent of the national total, which is why retrofitting is such a critical part of the UK’s journey towards the UK’s 2050 net-zero ambition.
A number of energy companies have launched cheap finance deals to help customers instal green measures, such as solar panels. However, Nationwide argues that a much more far reaching and radical approach is needed, led by the government.
A recent Independent report commissioned by OVO found that the UK would save a collective £5.6bn on energy bills and generate 28.5 TWh of electricity if all homes eligible for solar panels had them installed.
It said this could cut carbon emissions by 14.8m tonnes – the equivalent of taking more than half of all UK petrol cars off the road for a year – and generate enough electricity to power the nation’s EVs in 2024 for almost 10 years.
The Nationwide report recommends:
* More public awareness campaigns showing people the benefits of retrofitting and linking to information and advice.
* Create a National Retrofit Hub, which would support consumers from the beginning to the end of the retrofit journey.
* Energy companies to highlight benefits to customers where a retrofit need exists.
* Further collaboration between lenders and government, to support customers who are able to pay for improvements.
* Incentivise banks and building societies to offer their mortgage customers low-cost additional borrowing for retrofits.
Graham Lloyd, Nationwide’s Head of Strategy and Sustainability, said: “We believe the UK’s 2050 net-zero target can only be met through incentivising people to invest in their homes.
“As a mutual, we have chosen to make a difference, which is why we’re making it as easy and attractive as possible for our mortgage customers to retrofit their properties. But much more needs to be done and we need both the government and businesses to step in and step up to create meaningful progress.
“This cannot continue to be kicked down the road, as it has been for some years now.”
