Borrowers could be facing a “green mortgage timebomb” as they are hit with bills of £20,000 for energy efficient home improvements just as interest rate rises are starting to bite, the Liberal Democrats have warned.
The party says it has uncovered figures showing that the government’s original scheme, the Green Homes Grant, which has now closed, only helped 15,000 low-income households improve their insulation.
Ministers had aimed for the programme to help upgrade 600,000 homes.
The new plan for home insulation, which is part of the Heat and Building Strategy, has been criticised by the housing and mortgage experts for leaving homeowners to pay up to £20,000 extra on their mortgages in order to fund upgrades.
The Liberal Democrats are calling for homeowners to receive an income tax rebate to help pay for green home upgrades, instead of increasing the costs of a mortgage.
Liberal Democrat spokesperson for energy and climate change Wera Hobhouse says: “There is now a green mortgage ticking timebomb after this latest government failure.
“Homeowners face a double whammy because this government seems incapable of helping people with vital green upgrades.
“With mortgage rates already rising, this is the last thing homeowners need.
“We are in the midst of a cost of living crisis but the Conservatives appear completely out of touch if they want to pile even more costs onto innocent homeowners.
“There should be no trade off between saving the environment and saving people money on their bills.
“We know home insulation is not only the easiest way to only cut energy bills, but also to reduce the UK’s emissions, yet this government is committing a huge green home failure that future homeowners could pay the price for.
“We should be encouraging homeowners to make the switch with tax rebates, not eye watering bills which only the wealthy can afford.”
However, a spokesperson for the Department of Business, Energy and Industrial Strategy says:“These claims are nonsense.
“Our plans to decarbonise buildings and homes will neither dictate mortgage rates, nor house prices, and no one will be forced to upgrade their home.
“Our plans will support homeowners to reduce their energy bills by improving their home energy performance, and will increase consumer choice rather than restrict it, with the Boiler Upgrade Scheme putting affordability at the heart of our efforts, making the green choice available to all.”
Original Article from Mortgage Strategy 01/11/21