Your February update from AMI Chief Executive Robert Sinclair

AMI Chief Executive Robert Sinclair gives his February update, discussing the latest issues in the industry and how we can tackle them…

Tackling barriers: The Protection Gap

AMI Senior Policy Adviser Stacy Penn discusses the Perception Gap in the protection market, in this article originally published in Moneyfacts…

The FCA in the insurance space – a more assertive regulator?

Following introduction of Consumer Duty, we have seen signs the FCA is shifting towards becoming a more assertive regulator…

The Perception Gap

AMI Senior Policy Adviser Stacy Penn discusses the findings from AMI’s latest Protection Viewpoint – The Perception Gap, in this article written for TMA Club…

Consumer Duty: The next steps – what does 2024 have in store?

On 6th December 2023, the FCA hosted a webinar titled Consumer Duty: The next steps – we draw out the key points of relevance to mortgage intermediary firms…

Your January update from AMI Chief Executive Robert Sinclair

AMI Chief Executive Robert Sinclair gives his January update, reflecting on the challenges and opportunities of the year ahead…

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With fossil fuels a limited resource, global energy prices are expected to continue to rise.  Despite the relatively stable price of domestic gas and electricity over the past five years there is an upward pressure on household energy bills. Together with pledges to reduce greenhouse gas emissions, we will over time see a greater demand for greener homes.

In assessing affordability lenders calculate borrowers’ fuel costs using data based on historic household income which does not take any consideration of a property’s energy efficiency.  A group of organisations have launched the LENDERS project which aims to demonstrate that more accurate fuel cost estimates can be used by lenders, thereby allowing them to grant larger mortgages to lower energy homes.

Any initiative which encourages more efficient and greener homes should be welcomed; households benefit from lower energy bills and it’s a more sustainable option going forward.   This project will of course have many hurdles along the way and there will be wider impacts to consider.  For example, if the maximum borrowing amount varies depending on a property’s energy efficiency, how will this affect the buying process?  Will lenders even choose to offer larger mortgages for lower energy homes?  The long term goal to stimulate demand, in turn driving an increase in the values of greener homes and in the number being built is ambitious, but admirable.  Notwithstanding consumer behaviour, industry and government will need to work together if this is to be achievable.

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