"There are too many obstacles currently to retrofitting a property, with confusing offers and unclear steps on what to do."
- Arjan Verbeek, founder and CEO of Perenna
Long-term fixed rate mortgage lender, Perenna, has secured a spot in the UK Government’s Green Home Finance Accelerator to design a new retrofit mortgage.
Perenna will use the grant funding to refine and launch its retrofit mortgage product to market. The product aims to solve the biggest barriers to decarbonising UK properties and encourage homeowners to make energy efficiency improvements to their homes.
The project is funded by the Net Zero Innovation Portfolio (NZIP) under the Department for Energy Security & Net Zero as part of the department’s Green Home Finance Accelerator (GHFA). The GHFA was established to support the design and development of innovative green finance products that incentivise domestic energy efficiency and low carbon heating retrofit.
According to the UK Green Building Council, nearly every existing property in the UK will need some sort of retrofit, which is equivalent to 29 million homes. The Climate Change Committee estimates that an investment of about £250 billion will be needed to fully decarbonise homes by 2050.
Unlike other green mortgages, the Perenna retrofit mortgage will focus on homes that need to be upgraded, rather than homes which are already energy efficient. Perenna will offer consumers all the benefits of its flexible long-term fixed rate mortgage, launched in Q4 2023, with the additional benefits of a green rate discount being rewarded for lowering energy usage. Customers who complete a qualifying retrofit will see their mortgage rate switched to a lower rate and will benefit from lower monthly payments for the rest of their term.
Perenna says that for some customers with larger mortgages, its green discount could save them over £60 per month, £720 per year, and £21,600 over 30 years (assuming they don’t remortgage).
The mortgage will also offer a data-driven, digital approach to energy assessment, with installation and savings verification through a home energy management system from Heatio. Once the product is live, Energy Systems Catapult will conduct qualitative and quantitative research on the consumer experience of the proposition at key touchpoints.
The project will last for 12 months and Perenna plans to launch its pilot in summer 2024.
Arjan Verbeek, founder and CEO of Perenna, said: “Perenna wants to change the narrative on renewable energy technologies. There are too many obstacles currently to retrofitting a property, with confusing offers and unclear steps on what to do. This needs to change if we want to solve one of the biggest challenges for achieving net zero.
“We are delighted to be part of the Green Home Finance Accelerator and have the opportunity to work with Heatio and Energy Systems Catapult to pilot an innovative mortgage product that combines long term security with improvements in home energy efficiency.”
Thomas Farquhar, co-founder of Heatio, commented: “Our initiative with Perenna and Energy Systems Catapult is a bold step towards making energy-efficient upgrades not only financially accessible but also rewarding, alongside this next generation Green Mortgage, that drives energy reductions, not just rewarding those who are already efficient or low carbon. It’s important that we convey the idea that decarbonisation is not only achievable but beneficial. By making the transition to alternative heat and energy sources more seamless and appealing to homeowners we can drive forward the enthusiasm of homeowners to participate.
"The integration of the Heatio Flexx Home Energy Management Solution ensures a personalised and data-driven approach, providing homeowners with the tools and insights needed to embark on a journey towards a more efficient home. Supporting consumers with accurate information, based on actual in-home data, simplifying the process and giving accuracy and confidence for consumers will remove barriers to adoption. Driving positive change in the residential energy landscape, one home at a time.”
