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Relaunch of popular residential investment loan incentivises greener homes

A popular residential investment loan has been relaunched with the aim of incentivising small to medium sized investors to invest in energy efficient homes.

The Green Investment Loan, offered by the Real Estate Finance division of Secure Trust Bank (STB), is designed for investors looking to purchase or refinance residential assets where over 90% of the total floor area has an Energy Performance Certificate (EPC) rating of A-C. Investors in such properties can benefit from an interest rate which is more favourable than STB’s standard residential investment loan.

The loan is being relaunched after its first iteration saw around £150m of investment from STB secured against 525 energy efficient dwellings in just six months last year.

The relaunch responds to mounting pressure for the property sector to drive greater efficiency across the UK’s housing stock. Currently, over half of the homes in England are rated D or below for energy efficiency, with expectations that the regulatory requirements of UK landlords will tighten ahead of the Future Homes and Buildings Standard in 2025.

Under the terms of the loan, STB will offer a variable rate of 2.95% over the Bank of England interest rate for an LTV up to and including 60%, with that rate increasing to 3.10% for an LTV up to 65%. Loans are available from £2m – £45m.

Chris Daly, head of origination at Secure Trust Bank Real Estate Finance, said: “As the residential property sector faces mounting pressure to raise energy efficiency standards, it is vital that we do all we can to reward and incentivise greener practices through attractive funding options. Our Green Investment Loan has been introduced to provide greater scope for investors to acquire or maintain an existing stock, or release equity to fund further energy efficient residential projects.”