stock, there is a significant opportunity for the mortgage sector to plug that funding gap. The risks or challenges of ‘green’ may be less obvious to spot. Later this year, the Green Finance Institute will be launching the GFI’s Certificate in Green Mortgages which will help mortgage brokers and real estate professionals understand a bit more about green finance. The team and I have been working with a wide range of experts to pull together all the relevant facts about green finance sector and how they relate specifically to mortgage advice. These have been condensed into one 90-minute training session. As part of the training, we talk about the climate crisis, what that means for the UK, for UK housing and specifically for the mortgage industry. We consider the impacts of climate change on the mortgage advice process and delve into the risk of doing nothing. It also contains case studies about what this looks like in practice, an example of one below: • Purchase case, clients state during the fact-finding process that within the next 2 years, they would like to put solar panels on their home. • The advisor recommends a 5-year fixed rate product, the advisor does not mention the client's ambition to put solar panels on the property anywhere within the recommendation or suitability report. • 2 years later, the clients contact the advisor to say they would like to discuss raising additional finance to fund the solar panels, they might also like to consider some other home upgrades at the time. • The lender recommended by the advisor does not permit solar panels to the security property or allow mid-term additional borrowing. 09 SPRING MORTGAGE NEWSLETTER What are the risks to the advisor here? What is the outcome for the customer? How might adding some background about energy efficiency upgrades to the suitability report have changed this scenario? I used this example as it highlights, how even though the advisor has not recommended a green mortgage, the changing needs of customers now and into the future mean that at least a baseline understanding of the financing needs and restrictions relating to sustainable home upgrades is fundamental. Whilst it is not necessary to be an expert on different types of solar panels/heat pumps or any other green tech, understanding how to finance these home upgrades is not only a significant commercial advantage as the market gains pace, but also a fundamental part of future planning for your business. On the 31st May this year, the Financial Conduct Authority’s anti-greenwashing rules come into force. These consider not only those giving advice within any FCA regulated firm, but also anyone in a compliance function too. Reading up on this and understanding how this relates to your business will be a crucial step forwards as together, we facilitate the UK’s transition to net zero. The future of the green mortgage movement is exciting. There is so much innovation to be enthusiastic about and huge appetite from lenders to support this market and a wide plethora of tools to enable great advice. There is significant opportunity for mortgage advisors in green finance. If you would like to talk to anyone for support on integrating sustainability within your business, please get in touch with your Relationship Manager at Paradigm. Alternatively, you can request a callback from your Relationship Manager here. If you are interested in discussing the GFI Certificate in Green Mortgages, please register your interest here.
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