Green Mortgages

With a joined up policy between Government and the Finance Sector, we could develop a system of Green Mortgages for Jersey. For instance: banks agree to offer a lower rate to home buyers who agree to undertake extra insulation work or replace an efficient boiler within an agreed timeframe after purchase. As an extra incentive from Government, once the work is completed those home owners can claim for extended interest tax relief on their mortgage payments. This fiscal incentive helps offset the cost of the work and makes the mortgage repayments more affordable, which in turn incentivises the banks to offer lower rates to those homeowners on the basis of lower risk. Homeowners are at less risk of defaulting on their mortgage because their ongoing bills are lower. And the oney spent on insulation stays in the local economy so the tax revenue loss on the interest relief should be made up elsewhere (e.g. via GST). This seems like a virtuous cycle. 

Why the contribution is important

The measure would tackle a number of sustainability issues: climate change being the main one, by gradually improving the energy performance of the housing stock. But it could also help over time address issues around fuel poverty, if houses are cheaper to heat. It might also lay the foundations for a meaningful home energy audit system as we now see in other countries. 

by Dp20 on February 11, 2021 at 12:39PM

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