Despite the increasing number of specialist green deals available, two-thirds (63%) of advisers reveal their clients have never heard of the term ‘green mortgage’, according to new research from Mortgage Advice Bureau (MAB).

The research found that four out of five (83%) advisers say their clients have no understanding of green mortgages.

MAB explains that the property industry has a large role to play in reaching the UK government’s net zero 2050 target, with 20% of emissions coming from buildings. 

Nearly two-thirds of owner-occupied homes also have an energy performance certificate (EPC) rating of below C, meaning much work needs to be done to improve the energy efficiency of properties and reduce their carbon emissions.

Green mortgages are one such way to help incentivise homeowners to boost their property’s EPC rating. Only 3% of advisers say their clients fully understand a green mortgage, and 14% say their clients only partially understand them. 

MAB says this highlights a very clear need for educational work for consumers to help boost their knowledge and understanding about green mortgages.

However, the topic of green mortgages is coming up in adviser-client conversations, with 88% of advisers confirming the topic of green mortgages has come up in conversation in the last 12 months.

Of that, 84% said the topic was prompted by them, with only 3% saying the topic was prompted by their clients.

But there is still work to be done when it comes to advisers recommending green mortgage products to clients, with 30% of advisers saying they actively propose green mortgage products. 

Some 23% say green mortgage products are fine in theory, but it’s not always suitable. 

Understandably, 63% say that their main objective is to offer their client the most suitable mortgage product, but this isn’t always a green one.

Describing their attitudes towards recommending green mortgage products to clients, 8% said they need to upskill their knowledge and understanding of green mortgages.

The research also questioned advisers on where they think the responsibility lies in helping educate consumers about green mortgages and EPC ratings. 

Most advisers believe it is the responsibility of mortgage brokers, with 67% saying this. 30% said it is the responsibility of the government. A further 25% said it is the responsibility of the media.

MAB deputy chief executive Ben Thompson says: “While the country’s Net Zero targets may seem far away, the reality is we are hurtling towards them at a faster rate than many realise.”

“We no longer have the luxury of time, and the industry has a lot to do to not only decarbonise homes but increase consumer understanding of green mortgages and EPC ratings.”

“Despite the number of green mortgage products coming to market, there is a considerable disconnect between their benefits and the consumer knowledge surrounding them. This, therefore, throws into question their effectiveness.”