Home energy efficiency improvements proposed by the government “risk creating a time-wasting paperchase which will not achieve the desired results,” says the Intermediary Mortgage Lenders Association.

The lender’s body added that a consultation paper by the Department for Business, Energy and Industrial Strategy wrongly puts the focus to improve properties on lenders rather than homeowners.

The department’s Improving Home Energy Performance through Lenders consultation paper is a key part of the government’s plan to bring all greenhouse gas emissions to net zero by 2050.

The paper says UK homes made up 22 per cent of greenhouse gas emissions in 2018, if electricity consumption is included.

The proposals call on lenders to annually disclose portfolio-wide energy performance certificate data, as well as the gross value of lending for energy improvement works. They also call for a league table of lenders in this area.

It adds: “The energy performance of privately owned homes in England, including the private rented sector, falls considerably below the current standards of social housing.

“Improving the energy performance of these homes is a vital part of our wider strategy to decarbonise buildings cost-effectively, in light of the significant challenges posed by climate change.”

The consultation closed on 12 February, but the Imla said today that the proposals “could cause lenders to base their lending decisions on a property’s energy efficiency, rather than on a borrower’s needs”.

Imla adds that although the housing and mortgage markets “have an important role to play in addressing climate change”, these proposals “could lead lenders to spend disproportionate time and effort ensuring their average energy ratings are at an acceptable level”.

Imla executive director Kate Davies says: “If a property’s energy efficiency is reflected in its value, homeowners will be incentivised to make improvements—which can be financed by a combination of loans, for those who can afford them, and government grants to help those who cannot.

“It makes no sense to create artificial competition between lenders which could result in their avoiding lending on properties that are less energy-efficient and therefore less desirable. In the worst case, this could lead to some borrowers being unable to re-mortgage or sell. It is critical that this is avoided.”

Davies adds: “However, these latest proposals from BEIS are highly unlikely to bring about real change. Rather, they would oblige lenders to devote way too much time compiling and disclosing data in an exercise which—at the end of the day—won’t change a single low-energy lightbulb.”

Last July, chancellor Rishi Sunak announced a £3bn scheme allowing homeowners to apply for vouchers to cover at least two-thirds of the costs of improving their properties with measures such as better insulation, up to a limit of £5,000.