Yahoo Finance Barclays to pay borrowers £2,000 to install heat pumps
Barclays will pay mortgage borrowers £2,000 to install a heat pump, as it warned the majority of households cannot afford to make their homes more energy efficient.
The high street lender will pay its customers cash rewards for completing green works, including £2,000 for an air or ground source heat pump, £1,000 for solar panels and £500 for cavity wall insulation.
A survey of 2,000 homeowners by Barclays found that 90pc hoped to make eco improvements within five years, but three quarters said they were currently unaffordable.
Around 60pc of all homes in England and Wales currently have an Energy Performance Certificate rating of below C, according to recent research by lender Halifax, with older, bigger properties the worst offenders.
The Government wants all homes to be rated at least EPC band C by 2035 as part of its net zero drive. It will also require lenders to have an average Energy Performance Certificate rating of C across their lending portfolios by 2030, under proposals floated last year.
Owners of less efficient properties are likely to face higher mortgage costs or miss out on cash rewards as banks incentivise customers to upgrade their homes.
Barclays estimated the average cost of a heat pump varies between £9,000 and £19,000, so even with a £2,000 reward homeowners will need to make a significant investment.
Borrowers fitting a biomass boiler, costing between £11,000 and £17,000, could also qualify for the maximum £2,000 cash payment, while those installing solid wall insulation or solar hot water heating could get £1,000. Barclays said homeowners would only be able to apply for a reward on one type of energy improvement.
David Hollingworth, of broker L&C Mortgages, said: “We will see more and more lenders incentivising borrowers to make their homes more efficient as the focus on green targets grows and energy costs rise.
“Lenders have been rewarding those with new-builds, which are typically already very efficient, with better rates for years – the next challenge is improving the efficiency of the older housing stock.”
Barclays intends to run the cashback scheme as a pilot until November 2023 for new and existing customers. Borrowers will not need to apply for any additional lending with the bank to qualify but must show proof of the works, which must be completed by a contractor registered with TrustMark, the Government-endorsed scheme.
