Do customers really care about ecological issues?
NatWest’s head of mortgages admitted the bank faces an uphill struggle to educate customers about energy efficiency.
Last month, the bank introduced an Energy Performance Certificate (EPC) rating on the bank’s online mortgage hub to show customers up-to-date information about their property’s EPC rating.
And last July, NatWest was said to be the first bank in Europe to provide its customers with an estimate of the carbon footprint associated with their monthly spending. To better understand homebuyer preferences, the bank has also introduced the Greener Homes Attitudes tracker.
How many large portfolio owners would buy low EPC properties?
NatWest’s policies all aim to help customers become more energy efficient while ensuring that 50% of the bank’s mortgage portfolio is at or above EPC ‘C’ or equivalent rating by 2030.
However, results from the tracker revealed that only one in five households were “very concerned about carbon emissions from homes in the UK”.
Furthermore, only around a third of UK households considering buying a property over the next decade said they thought a property’s EPC rating was a “very important” factor. On a more positive note, the results revealed that 63% of homeowners plan to make green improvements to their homes over the next decade.
Overall, the results are little changed from last year, when 55% of households ranked flooding as the most important factor, followed by noise pollution, air quality and local green spaces. , all of which ranked significantly higher than the EPC rating issues.
Lloyd Cochrane (pictured), the head of mortgages at the bank, admitted that while customers were becoming more aware of the energy efficiency of their homes, more needed to be done to raise awareness of what improving the energy efficiency meant for individual customers.
“Consumers don’t think about energy efficiency, especially when buying homes. It’s something I think we all assumed before July of last year. We are now investing in this tracker that proves it. Unless the consumer recognizes the importance and value of energy efficiency ratings…then nothing else will work,” he told Mortgage Introducer this week.
Last year the bank lent £728million in green mortgages to retail customers, a service which is only available to homes with A or B energy efficiency ratings, which account for around 12% of the country’s current housing stock.
But banks and other businesses could find it even harder to get the green message across in the coming months, with the rising cost of living poised to hit households harder than ever, all the more so in the aftermath of the catastrophic Russian invasion of Ukraine – a component no one had factored into the equation until now.
“I don’t think we can yet understand what demand, if any, this has on consumer confidence. It’s a very confusing picture at the moment,” Cochrane admitted.
Nonetheless, he stressed that NatWest is committed to continuing to gauge customer response to its green policies and to play an active role in educating households.
“We aim to be a leading voice supporting action to reduce the impact of climate change, rather than just being in the mortgage business,” he said.
He highlighted the bank’s commitment to educational products, having last year created what it called the “Sustainable Homes and Buildings” coalition with a range of companies and associations, including Bosch, British Gas, Citizens Advice and Shelter, to reflect on the challenge of greening the UK. houses.
But with emissions from homes accounting for around 15% of UK carbon emissions, Cochrane acknowledged that reaching the net zero targets the government had set for 2050 would require “quite significant changes” to the housing market in the UK. UK – a direct hint that the government might need to get a lot more involved.
“Lenders are only part of solving this problem. You’re talking about 28 million homes in the UK – individual actions that need to be taken by consumers and a lack of understanding of what those actions need to be.