Rebecca Evans will today announce that energy efficiency will be part of the equity loan affordability calculator for Help to Buy-Wales applicants.
This was published under the 2016 to 2021 administration of the Welsh Government
The Welsh Government is the first organisation in the UK to put this in place.
Speaking to the UK Finance Annual Cymru Mortgage Lunch, she will explain how Help to Buy-Wales equity loan applicants will be able to borrow more money for a more energy efficient home.
Rebecca Evans said:
“From this June, the Help to Buy-Wales equity loan affordability calculator will include an energy efficiency element. This means when people look to see how much they can afford they will be given different options depending on the energy efficiency of the property they are looking to buy, and loans will be adjusted according to the energy rating of the home they choose.
“A more energy efficient home costs less in bills, so buyers will potentially be able to afford to borrow more. We know that energy spending can be a major household outgoing, which is why we want to make energy efficiency part of the consideration when people look to buy a home in Wales.
“We have worked closely with the Building Research Establishment on the LENDERS project which modelled this work, and we are the first government, indeed the first organisation in the UK to put this into practice.
“Whilst there is no obligation on mortgage lenders to change existing practices or their own affordability assessments, we hope to see them follow our lead and make energy efficiency part of the mortgage consideration for all homebuyers in Wales.”
Andrew Sutton, Associate Director, BRE Wales, said:
“This announcement is a great step for the LENDERS project outcomes and fantastic news for first-time buyers in Wales. The more accurate forecasting provided by the research will help many onto the housing ladder who might have struggled to obtain a mortgage previously, and the research we will do in parallel with the adoption should help other financial institutions better understand the practicality of implementing.
“I am delighted to see the LENDERS project translated from research into reality and I hope to see other mortgage lenders follow suit.”