Green mortgage market unlikely to grow

The market for green mortgages is unlikely to experience strong growth in the near future and could indeed remain static, according to the head of mortgages at Moneyfacts.

Darren Cook said that lenders are putting more emphasis on underwriting and ensuring a healthy lending book as a result of the credit crunch and ethical lending is therefore taking a backseat.

He said those lenders already offering green mortgages, such as the Co-operative Bank and the Ecology Building Society, are likely to continue to do so as in many cases it is part of their corporate social responsibility policies.

However he said he does not expect to see many new players entering the market because they are too focussed on their loan-to-value ratios and protecting their lending books.

"I don''t see these products disappearing – but I''d be surprised if we suddenly saw a large amount of new lenders coming into the green mortgage area at the moment," he remarked.

Lenders who offer green mortgages often give donations to charities that support the environment or engage in initiatives such as tree planting. They may also offer specific loans for reducing emissions in the home.

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