Paragon launches Green Homes initiative to increase delivery of top-rated energy efficient properties
Paragon Development Finance has launched a Green Homes initiative to support SME housebuilders developing new domestic properties with the highest energy performance standards.
Under the scheme, developers delivering homes with an Energy Performance Certificate rating of A will receive a 50% reduction on loan exit fees.
To qualify, at least five private units must be built within the development and 80% or more of these must have an EPC rating of A, with any remaining being at least EPC C standard.
The initiative is designed to support the UK government’s target of net zero carbon emissions by 2050 and reducing emissions by 78% by 2035. The Future Homes Standard, from 2025, will require new homes built to produce between 75% and 80% fewer carbon emissions.
Government data showed that of the 222,966 EPC ratings lodged for new domestic dwellings last year, just 3,457 were rated at EPC A level. The vast majority, 81%, were rated at EPC B.
Robert Orr, Paragon Development Finance managing director, said: “The direction of travel is clear – we need to start building more homes in the UK that will help deliver the government target of net zero by 2050.
“Many housebuilders are already adopting measures to improve the energy efficiency of their homes and there are early signs consumer sentiment is shifting towards a preference for more sustainable homes. However, only 1.5% of new homes last year had the highest EPC rating, so we need to do more.”
He added: “As a key lender in this sector, we also have to play our part and that is why we have launched the Green Homes initiative. This delivers a tangible financial benefit to SME developers focusing on building the most energy efficient homes and we hope that it encourages more developers to drive improvements in this area.”
Deborah Bateman, sustainability director at Paragon Banking Group, said: “It’s vital that we support customers across our business lines on the journey to net zero and we are looking at ways we can help them to improve both their own operations and also the product they produce. We want to ensure there is a tangible benefit to them for doing so and we believe this initiative will be popular with SME housebuilders as they develop the green homes of the future.”