Source · Select Committees · Environmental Audit Committee
Recommendation 27
27
Paragraph: 130
Alongside an extension of the Green Homes Grant, other financial incentives, such as low interest...
Conclusion
Alongside an extension of the Green Homes Grant, other financial incentives, such as low interest loans, will need to be made available to owner occupiers and landlords to achieve the thorough retrofit of domestic housing stock the Government envisages. The Green Finance Institute has identified 21 possible products. It is therefore disappointing that the Green Home Finance Innovation Fund only looked at green mortgages and did not pilot stamp duty rebates and low interest loans which have shown considerable success in other parts of the world. We look forward to hearing more details from the Government on how the proposed National Infrastructure Bank will be used to finance domestic energy efficiency.
Paragraph Reference:
130
Government Response
Accepted
HM Government
Accepted
We agree with the Committee that a range of financial products will be essential to support owner occupiers and landlords to improve the energy performance of their homes. We have seen good progress over the last 12 months with a range of large and small financial organisations start to develop and launch products. Alongside our proposals for mortgage lenders and our existing Green Home Finance Innovation Fund, we are considering what further action may be required to catalyse the market for a wide range of attractive and low-cost green finance products. This includes exploring whether there are options for the recently announced UK Infrastructure Bank to support retail lenders to deliver green finance to homeowners. The mandate for the Bank is currently under development and is due to be announced by HM Treasury this summer. Regarding Stamp Duty, trials of Stamp Duty rebates for energy efficient homes are not under active consideration at this time. HM Treasury is responsible for tax policy. Stamp Duty Land Tax (SDLT) raises billions of pounds each year to pay for the essential services the Government provides. HM Treasury believes linking SDLT to the energy efficiency of the property will, by the nature of its design, reduce tax revenue in the long-term. Furthermore, HM Treasury believes SDLT is a fair and progressive tax. Properties under £125,000 do not attract any SDLT at all, and neither do first-time buyers buying a property under £300,000. This means that in 2019–20, 34% of people buying a property did not pay SDLT at all. Any changes that would reduce SDLT revenue would have to be carefully considered given the impact on public finances, as would the impact on access to housing and social mobility if stamp duty was increased for low energy efficient home.