Funding only energy label A homes is antisocial

Funding only energy label A homes is A-social

Of course, it sounds nice, a mortgage proposition for only energy label A homes. However, if we want to reduce the energy consumption of the Dutch housing stock, making the old housing stock sustainable is the fastest route, even if no A-label can be achieved. Moreover, by excluding the old housing stock from financing, makes it even harder for house hunters. 

There are more and more energy label A propositions coming into the mortgage market and that is not crazy. It is nice for a certain group of consumers; they can count on mortgage interest rate discounts. It is also nice for the investor, as they can prove that green investments are being made. Moreover, the value rises faster, there is more overbidding in sales and a label A property is sold faster compared to homes with a worse energy label, according to a recent NVM (Dutch Association of Real Estate Agents and Appraisers)  report¹ . Thus, excluding less energy-efficient homes has many benefits against clear lost interest income. 

But what is the impact of an energy label A proposition? The proposition that the impact is close to the zero line is perfectly defensible. Firstly, for label A propositions sustainability measures are hardly an issue. This is because they are mostly homes built after 2014 that already have an A label. Or they are homes with, say, a B label, which can become a label A home with a limited investment. So impact in terms of making the housing stock more sustainable hardly applies. Where exactly can a big bang be made in terms of sustainability and thus impact? That are precisely the homes with a poor label. Like a G-label, for instance. These houses have little or no insulation and usually have single glazing. 

Secondly, mortgage providers with housing finance also have a social duty, or the S of ESG (Environmental, Social, and Governance) . This is hardly the case when exclusively financing label A homes. Those are mostly in the higher end. Starters are thus not helped in their entry into the housing market. Besides, given the shortage of 400,000 homes, starters have other priorities than the energy label. These are happy with any affordable home, regardless of the energy label. Finally, for part of the market it is very difficult to make it sustainable, such as with flats within a VVE and with monumental properties. Within a VVE (apartments governed by homeowners’ associations))  , the majority must agree to sustainability measures. In addition, the monument law, with good reasons of course, makes it practically impossible to make a monumental building sustainable.

There is also a danger in excluding homes with a worse energy label as label A propositions continue to gain in popularity. This will make it increasingly difficult for potential buyers of non-label A homes to get a mortgage. And how does that affect refinances with a relatively poor energy label? Will this group of people soon also run into a wall? 

Society and the climate benefit from improving the existing housing stock, because it is precisely here that metres can be made quickly. And that is exactly what is so badly needed. The current and rising housing shortage of 400,000 has real impact on society. Partners have to postpone living together, 18+ year olds who want to live independently have to push this desire forward and couples who want to break up are also made even harder to live. Therefore society cannot afford such a selection policy at all. Mortgage lenders need to take their social role here and not just but cherry-pick. After all, every home and every occupant counts.