Packager Power

Given Gordon Brown\'s intention to build five eco-towns, are we likely to see a change in house building? And, as some lenders promote green loans, will we see sections of packagers\' panels dedicated to this type of lending?

MIKE KIEL, partner, Hallmark Mortgages

It’s difficult to make predictions about this issue given the constantly changing situation regarding Home Information Packs.

I imagine that HIPs will vanish in August under pressure from the Roy-al Institution of Chartered Surveyors, and this will leave the green credentials of our leader-in-waiting Gordon Brown looking somewhat thin.

When you consider the amount of time, effort and money that has gone into preparing for HIPs, a lot of people will be bitterly disappointed and many more will be angered. Imagine the frustration of having paid to qualify as an energy inspector only to find that your potential market is re-stricted to four-bedroom properties and above.

I don’t believe there will be a market for packaging green loans unless the necessary incentives are introduced to direct the market towards them.

Whether these incentives come through government intervention – which has thus far proven unsuccessful – or lenders adopting a less profitable but more green approach, we shall see.

The hotter issue is how the Financial Services Authority will view green loans with regard to its recommendations to brokers, who are re-quired to treat customers fairly.

Of course, loans should be sourced according to clients’ individual re-quirements, but is saving the planet more important than putting your property at risk?


NEIL MCLENNAN, operations director, Direct Mortgage Answers

Acting more responsibly towards the environment is important for everyone on the planet so what can we in the financial services sector do? Bearing in mind that most homes contribute heavily to pollution, there is much that can be done and we need to help people take the first step.

This issue has come into focus as we work towards meeting our obligations under the Kyoto agreement on climate change. It is easy to criticise HIPs and the effect they will have on the market, and their protracted introduction is rightly the cause of much derision.

But we should welcome the compulsory inclusion of Energy Performance Certificates in the packs, as these will eventually affect the housing stock. A financial incentive will be in place to reduce energy wastage, meaning we will see a major drive towards greener properties.

Brown’s announcement of the construction of five eco-friendly towns should be a blueprint for developments throughout the UK. For example, green mortgages are being introduced by various lenders which provide further financial incentives to improve energy performance. This ties in well with the introduction of EPCs.

Lenders should increase the supply of green loans and packagers and brokers should promote them so everyone can benefit from the creation of more energy-efficient houses.

The drive to do what we can to save the planet is paramount and I hope that not being green will become as unacceptable as smoking.


TONY HUGHES, managing director, Pavillion Securities
The green mortgage market is set to grow as consumers become more en-vironmentally aware and demand ethical financial products. Packagers will respond to this.

Co-operative Bank has led the way in environmental and ethical lending. It says that changing consumer attitudes to global warming coupled with Brown’s pledges of support for green finance will lead to a significant rise in the number of lenders off-ering green mortgages to customers, and I agree.

A relatively small number of len-ders offer them now but as greater incentives to go green are offered, more lenders will surely jump on the bandwagon.

HBOS plans to launch a green mortgage next year and the Yorkshire has welcomed Brown’s ann-ouncement and stated that it will launch a pilot project.

The pilot will make advances available for energy enhancements for homes, with more products being added later this year. Meanwhile, Co-operative Bank is working on eco-friendly features to be built into its mortgage portfolio.

Each time it completes a green mortgage, Co-operative Bank makes a donation to an organisation dedicated to tackling climate change and this has raised around £1.5m to date.

What is unknown is how specialist lenders will react to this type of in-itiative. This will determine whether green lenders appear on packagers’ panels.