P2P can help UK meet net zero homes target
Peer-to-peer lenders can help the UK meet its net zero homes target by championing the use of modern construction methods and financing more property developments.
Following the COP27 conference on climate change earlier this year, renewed focus has been placed on helping global economies reach net zero. The UK has set out a strategy to decarbonise all sectors of the economy to reach net zero by 2050.
According to UK Finance data, 28 million households in the UK account for 14 per cent of the country’s total carbon emissions, with buildings representing the second largest source of emissions in the UK. When lenders make net zero a key requirement for property developers, they can help to reduce carbon emissions from the very beginning of a new housing project.
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Several P2P property lenders have already been working hard to facilitate the transition to net zero homes. Assetz Capital aims that 95 per cent of all the new homes it funds will have an energy performance certificate (EPC) of B or higher by the end of this year, and the platform has been a vocal supporter of factory-built eco homes to address the housing crisis.
Meanwhile, Blend Network has launched a ‘Green Is Good’ initiative, which aims to promote net zero housing developments, and Relendex has been working on reducing the emissions on the property developments that it funds.
“Relendex has a proven record of financing sustainable housing,” says Paul Sonabend, executive chairman of Relendex.
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“We believe that our modern methods of finance such as P2P are perfect for housebuilders using modern methods of construction.
“In 2021 30 per cent of all loans on our platform were sustainable with this percentage hopefully doubling by the end of 2023.”
P2P lenders have the first mover advantage when it comes to creating net zero housing. They tend to be much more hands-on with borrowers than traditional lenders, and can set stricter eco targets for developers, while also choosing to fund ambitious projects.
For Sonabend, there is another benefit. “Our investors love our ‘green’ loans and rush to invest on them upon listing,” he adds.
“They value the fact that P2P gives them a large percentage of the interest pot, providing excellent returns whilst allowing them to feel good about the fact that they know they are investing ethically.”
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