Many prospective buyers will be keen to see a wider range of mortgage products on offer in 2021. A wider range providing greater financial support could be the difference between a household buying a home or not.
There are also calls for major lenders to be more proactive when it comes to energy-efficient products that promote the reduction of carbon emissions.
NatWest, Lloyds, Barclays and HSBC are some of the names which have been criticised for a lack of action in this area.
“UK banks have talked the talk on climate, but their actions have fallen short. The government wants disclosure to be mandatory across the whole economy by 2025 anyway, [so] banks should have done this already” said Simon Youel, who is the head of policy and advocacy at Positive Money. This is an organisation which promotes a fairer financial system.
Barclays chairman Nigel Higgins spoke at the Financial Times Global Banking Summit, saying: “If you wind the clock back, we along with lots of other people . . . have been slower than, with hindsight, we should have been to address the climate challenge. Nobody can be happy looking at where we are today and be pleased with the amount of progress we’ve made since this topic first moved centre stage.”
NatWest have been proactive
Near the end of 2020, NatWest took a lead on these matters and introduced the first “green mortgage” in the United Kingdom. Anyone buying a more energy efficient home is in line to enjoy a more appealing rate of interest.
Lloyd Cochrane, NatWest head of mortgages, said: “The green mortgage for new customers was the first priority because it was a relatively simple change, but we’re working on how we can help our 1.2m existing customers.”
Big names can do more
Lloyds have promised they will unveil more detailed emissions data and targets in February of 2021. The company has been actively involved with the renewable energy sector, but they haven’t been as active on green matters when it comes to retail banking. So far, Lloyds have offered online tools that helps people and developers make informed decisions regarding green homes, but they aren’t offering products just yet.
This might change, but it could be smaller organisations take the opportunity to become market leaders when it comes to energy efficiency.
Oxbury Bank, a newly licenced entity, are leading the way. In January 2021, they aim to open the very first “carbon offset savings account”. With this account, money that would traditionally be earned in interest will be used to cover the cost of tree planting projects.
Kevin Hollinrake, a Conservative MP and chair of the all-party parliamentary group on fair business banking, has called on banks to provide customers with more information with respect to the impact of their lending.
The MP has also called for banks to reassess the ways they assess risk. He said; “Over the past year the banking sector has made progress in acknowledging its role in climate change and making high level commitments . . . But this has only taken us to the start line. The hard work now begins, and we cannot underestimate the scale of the challenge ahead.”
Anyone looking to arrange informed and up to date guidance regarding a mortgage should speak with an experienced professional.