It seems that every time we turn on the television or read a newspaper, we are bombarded with messages about green initiatives designed to delay the almost inevitable onset of global meltdown.
I’m as concerned as the next person about the state of our environment, but I have to admit I’m becoming a bit cynical about some of the initiatives being proposed, including those in the mortgage sector.
The government has been keen to encourage lenders to launch so-called green mortgages and a few have done so, but I’m less than convinced by some of the schemes on offer. Most appear to be mediocre deals given a liberal dose of greenwash. Typical initiatives include planting trees when mortgages are taken out, providing cashback to pay for energy-efficiency improvements and donating money to environmental charities.
There’s nothing wrong with that – it’s no different to charitable credit cards that give money to a good cause whenever you use your plastic. However, there is nothing intrinsically different about green mortgages.
In fact, I find it hard to envisage how mortgages can be green in the true sense of the word. To do so, they would need to directly influence the type of properties people buy. I guess mortgages only available on houses with a zero carbon footprint could be described as green. But the truth is that most mortgage deals could be used to buy such properties. In reality, green mortgages are no different to any other type.
The niggling concern at the back of my mind is that if lenders jump on the green bandwagon simply as a means of giving their products a new lease of life, there is a danger that consumers will become even more cynical about financial institutions.
As an industry, it’s in everyone’s interests to build and maintain a positive reputation for the sector. Accusations of greenwashing will do no-one any good.
HIP ripples, but no tsunami
As time marches on, it’s looking increasingly likely that Home Information Packs are going to happen. The debate has consequently shifted to their likely impact.
The Doomsday scenario is that HIPs will cause a big spike and then dip in the housing market, as sellers try to beat their June 1 deadline. But I can’t see this happening to the extent that some people suggest.
Although there may be a hard core of sellers savvy enough to put their properties on the market before the deadline, the vast majority are not even aware of it. I suspect that the HIPs launch may cause a few ripples, but I’m not preparing for a tsunami.
As for their longer-term effects, the reforms to the conveyancing process now being implemented by the Land Registry will eventually make many elements of the HIPs redundant. According to some recent surveys, the Energy Performance Certificate is going to have about as much impact on house-buying habits as energy ratings have had on TV and fridge sales.
EPCs seem like a good idea, but the more I think about them the more I come to the conclusion that they’re a bit like food labelling. Having coloured wheels showing fat, sugar and calories levels are all very interesting, but have they changed my shopping behaviour? Not a lot.
Would a low EPC rating put me off buying what would otherwise be my dream house? Of course not, but it might encourage me to lag the loft after I’d purchased the property. So I guess EPCs are no bad thing after all. The big question is whether HIPs are really needed to support the environmental cause. I think I’ll leave it to my husband Alan to answer that question.
Green cause, opposite effect
Although the UK buy-to-let market continues to confound pundits by going from strength to strength, there is good reason to believe that its hitherto phenomenal rate of growth may slow down during the next couple of years.
I’m not talking about bursting bubbles, but you only have to look at single-figure growth rate projections for the housing market, along with lower yields on rental property, to appreciate that the frenetic growth may soon be over.
Of course, every cloud has a silver lining and the new growth market is overseas property. Barclays reckons the number of Brits owning property abroad is set to double to 4.4 million.
It’s no surprise really. The plethora of TV shows dedicated to buying abroad, combined with our national fascination with home ownership, is bound to fuel this trend. With houses in the UK becoming less affordable and available, some European countries’ comparatively underdeveloped housing markets will become increasingly enticing.
This is a market that brokers cannot afford to ignore. They must not only appraise themselves of the mortgage products available for buying overseas property, but also the myriad of issues their clients will need to consider, such as legal and tax differences in foreign lands.
However, it makes me smile to think that just as the government is introducing measures such as EPCs to make UK housing more green, millions of people are increasing their carbon footprints by jumping on planes to investigate the overseas property market.
Is this an example of the law of unintended consequences?