Most people believe that stronger state intervention is required to boost take up of green mortgages, says the Intermediary Mortgage Lenders Association.

The conclusion garnered from a survey carried out by Imla comes a year after the government announced a £5m fund to encourage lenders to develop green mortgages, named so because they reward borrowers for making energy efficiency improvements to their homes.

The survey shows that 71 per cent of lenders and 74 per cent of advisers believe government action towards borrowers is necessary to stimulate the green mortgage market, and 52 per cent of both groups want to see more incentives for lenders to develop green mortgages.

A small minority – 13 per cent of lenders and 6 per cent of advisers, meanwhile, would like to see “radical” intervention – such as sales restrictions on inefficient homes.

Getting the word out on green mortgages and what they offer is one challenge the industry faces. For example, 43 per cent of borrowers who were asked about them had never even heard of a green mortgage, with 33 per cent saying they must surely be more expensive than a typical mortgage.

And 27 per cent of UK homeowners say that affording the costs to improve their home’s energy efficiency is a problem. Imla says that are 29 million homes in the UK that require upgrading on this count.

The research is encouraging for advocates of green mortgages in some respects, however: 20 per cent of homeowners say they’d be willing to pay a further £100 on their monthly mortgage bill to lower their carbon footprint (with 43 per cent of these saying they’d to so for altruistic motives rather than saving money on bills), and 13 per cent of advisers have seen a rise in green mortgage enquiries since the start of the pandemic.

On top of this, 74 per cent of lenders asked believe that green mortgages will become a larger part of the wider market in the future.

Imla executive director Kate Davies says: “Lenders and advisers are already recognising the opportunities presented by green mortgages as consumers ‘switch on’ to eco-friendly products and recognise the devasting potential of climate change.

“Now, with a Covid-19 lockdown giving us all a temporary view of a world with reduced carbon emissions, the growth of the green mortgage market could accelerate yet further.

“Despite the potential for green mortgages to be an ever-present option for customers, the issues and barriers surrounding these products are much wider than the UK mortgage market.

“The government has already committed to making Britain a carbon-neutral nation by 2050. Upgrading the UK’s existing housing stock, to make homes across the country more energy efficient, will be critical to that goal.”