(Re)Investing in Green

The Secure Trust Bank (STB) has relaunched the Green Residential Investment Loan, aimed at incentivising investors to purchase properties with good Energy Performance Certificate (EPC) ratings. Boasting favourable interest rates, the loan is available for loans over £2 million on residential properties where over 90% of total floor space has an A-C EPC rating. It’s designed as part of wider efforts to tackle emissions in England, where a net zero carbon emissions by 2050 target is in place. However, the 2022 UK Housing Review by the CIH (Chartered Institute of Housing) revealed there are still insufficient financial incentives for decarbonisation in the residential sector [1]. STB’s loan arguably addresses this; the Green Residential Investment Loan was first launched in 2021 as part of STB’s Greener Homes Scheme, and saw approximately £150 million of investment in 525 properties. It has now been relaunched in the hope of spurring further green investments.

The need for a greener property market cannot be understated. In 2020, the residential sector in the UK was responsible for 16% of total carbon emissions [2]. While some emissions had fallen, most notably the business sector, waste management and industrial processes, the residential sector’s carbon emissions rose by 1% [2]. This is arguably a result of lockdowns during the pandemic and ongoing remote/flexible working arrangements. Emissions in the residential sector came from a variety of sources, including operating gardening machinery, cooking, consumer product use, and the use of fluorinated gasses found in the likes of aerosols, however the main culprit was the heating of properties [2]. Despite temperatures rising on average, the more people stay at home – the more people are using heating to warm their properties in cooler months for longer periods of the day. Therefore, finding ways to promote more sustainable solutions in homes, which are conducive to lowering emissions, is critical.

Recent findings by the New Open Property Group found that only 40% of homes in England met the requirements of a ‘C’ EPC rating [3]. EPCs are used to indicate how energy efficient a property is, using an A (very efficient) to G (inefficient) scale rating. The certificate provides a summary of your property, and offers suggestions for how the rating can be improved (if necessary). Ratings are calculated by a professional assessor using a range of different measurements, including: potential for heat and energy loss, insulation, efficiency of heating and water systems, double-glazing, energy-saving light bulbs, and so on. When having an EPC carried out, the assessor usually takes measurements and photographs, and provides a certificate that is valid for 10 years.  EPCs are now legal requirements for buying, selling or renting both commercial and residential properties, and are now stored on a national register (as of 2020) for 20 years.

The analysis of EPC ratings in England found that Manchester fared slightly better with 48% of properties meeting ‘C’ level ratings, yet still showed that half of the city’s dwellings still lacked good energy performance [3]. The City of London came in above average, with just under two thirds of properties possessing A-C ratings. However, some of England’s major cities, such as Birmingham, Brighton, Stoke-on-Trent and Leeds, showed very poor EPC ratings.

The leading issues of homes in England and energy performance is their age. The UK has the oldest housing stock in Europe, with 20% of homes exceeding 100 years old [1, 4]. Floors in old properties tend to be a key source of energy loss, where a significant amount of heat escapes through timbers. In addition, uninsulated roofs, single-layer brickwork in walls and chimneys also contribute to heat loss. Although there are a range of ways to improve energy performance in older properties, the Opinions and Lifestyle Survey 2021 revealed that only 19% of people in Great Britain would consider making changes to their homes. This is mainly due to the fact they believed their home was sufficiently energy efficient, they didn’t own the home outright, or they were worried about the cost of improvements [4].

Consequently, efforts have largely been focused on providing more energy efficient structures to newer homes. Research shows that residential homes built after 2012 are significantly more likely to have an A-C EPC rating, compared to only 12% built pre-20th century in England [4]. Thanks to recent changes in building regulations and legislations, such as the Future Homes and Buildings Standard, and financial incentives, such as the Green Residential Investment Loan, it is expected that the property market will continue to become more sustainable.

The focus on greener homes has proven popular. In a statement made from the initial launch of the Green Homes Scheme in 2021, Real Estate Finance Relationship Director, Chris Daly, claimed that there has been “a real push from industry and government for homes to be more sustainable”. He added that the demand for the first Green Residential Investment Loan illustrated there was a strong urge from residential property investors and developers to adopt greener investment strategies. This means that despite challenges in reshaping older properties, there is willingness to change future homes for the better.

If you’re looking to improve your own home’s energy performance, there are a number of ways to do so. Some of the key ways include:

  • Insulating the loft/roof/walls
  • Fitting double-glazing
  • Replacing an old boiler
  • Installing solar panels
  • Opting for energy-efficient light bulbs
  • Adding insulating jackets to your hot water tank

If you’re considering getting an EPC, find tips on how to prepare for a domestic EPC, and for a commercial EPC.


1] CIH (2022) UK Housing Review 2022 shows faster progress is needed to tackle poor energy efficiency of older homes  https://www.cih.org/news/uk-housing-review-2022-shows-faster-progress-is-needed-to-tackle-poor-energy-efficiency-of-older-homes

2] Department for Business, Energy and Industrial Strategy (2022) 2020 UK Greenhouse Gas Emissions, Final Figures https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1051408/2020-final-greenhouse-gas-emissions-statistical-release.pdf

3] Open Property Group (2022) 2022: 40% of homes in England have an EPC rating of ‘C; or above https://www.openpropertygroup.com/landlord-hub/2022-epc-ratings/#:~:text=2022%20EPC%20Ratings%20in%20England,

4] ONS (2022) Age of the property is the biggest single factor in energy efficiency of homes https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/ageofthepropertyisthebiggestsinglefactorinenergyefficiencyofhomes/2021-11-01