Episode 129: Green finance and its role in UK housing stock development (The mortgage advice series)

[Music] Good afternoon, welcome everybody to today's this month's event, the LRBF Mortgage Podcast. My name is Gordon Reed Business Development Manager here at the LRBF and your regular Mortgage Podcast host. In today's podcast we're going to focus on some of the issues relating to the UK housing stock, to green finance and in particular to the role of education in developing everybody's awareness of this, and indeed the take up of green finance initiatives. I'll join this afternoon by three ladies who it would be fair to say are all very passionate about this topic and have extensive experience, skills and knowledge in the subject. So not setting you up two early ladies, but I'm expecting great things this afternoon. They are also first time LRBF Mortgage Podcasts, so it's lovely to have some new voices to add to the range of experts. I've had the pleasure of engaging with over the last 18 months. Ladies, welcome, we've got Chloe, Rachel and Danielle, lovely to see you all and I'll do a little introduction in a minute, but nice to have you with us. Thank you. Thank you. Quite alright. Firstly, I'd like to introduce Chloe Timpoli, Senior Policy Advisor at Amy, the Association of Mortgage Intermediaries, and also author of a book about the UK Housing Crisis called Generation Rent, which I just need to say I discovered this afternoon is available £8.39 in paperback via Amazon. Okay, let's say this. No, no, no, it gets a really good write up. I'm going to need to get a copy of it from my next holiday, I think. Chloe, so thank you very much for that. Unless you want to spend the holiday very angry, I would probably advise against that. Oh Chloe. So Chloe, please. I'm in a good way. Good. Yes, I'm sure it won't make me angry much. Chloe's focus at the Association of Mortgage Intermediaries currently includes Green Home Finance, ESG, the Consumer Duty and the later life lending market. So, so nothing major there, then Chloe. No, just all in the day's work. I was going to say I don't know what you do the rest of the day. Just sleep, you know, I'm just a bit manic lately, so I can imagine. Next, it's a very warm welcome to Rachel Honey set from the Green Finance Institute, having started out as a mortgage advisor and moving into various business development roles. Rachel now has the opportunity in her role at the Green Finance Institute to combine her passion for sustainability with her career. Rachel is responsible for the Green Finance Institute Green mortgage campaign with a core focus of creating a scalable green mortgage market, which plays a significant role in improving the energy of efficiency of UK housing stock. Try saying that in one breath. Absolutely. But it's again, sounds very, very simple again. I don't know what you do the rest of you, though. Fantastic. Well, we, we, we took his book, I think, is now my new money plan moving forward, and I thank you very much. It's really, really lovely to be with you today and amongst technological guests. Brilliant. Thank you very much, Rachel. And lastly, I'd like to extend a very warm welcome to Daniel Stevenson. Daniel is senior mortgage product manager at Virgin Money with over 20 years experience in the mortgage market. Daniel again has worked in a variety of roles, giving her significant knowledge in areas as diverse as sales distribution data analytics and risk management. She's now primarily focused on translating Virgin Money's mortgage finance emissions targets into a measurable path to net zero. That sounds like quite an interesting challenge as well, Daniel. It is. It is. Not as impressive as writing a book or. And presumably like me, you're going to be reading this book as well, but not on holiday. I'm definitely going to be reading it. No, there are different, there are different types of impressive beats. I'm sure I would your job sounds a bit beyond me with all that different diverse areas to look in. And get a bit more perspective, a bit more background. I know you're working alongside right move and zero with funding from the green helm. Green homes finance accelerator fund with an objective of developing financial products which enable consumers to install energy efficient measures in the home. So quite. It's a great opportunity for Virgin Money, so we're the lead organization on that we have been successful applicants for the green homes finance accelerator fund. So get to work with some energy tech expertise and data expertise and write moves with quite exciting proposition. I can see the direct links between what you're doing and Rachel, you know, in terms of improving the energy efficiency of the UK housing stock, which is. Is obviously one of the key challenges if you like for the sector. It is and rich and light met not less week before to have a little chat about the things that will work and on what we plan to do moving forward fabulous. Well, hopefully we'll give you a little bit more of an opportunity to talk about some of those things this afternoon. And I think I'm right in saying I know you just said you met earlier a couple of weeks ago, Daniel, Chloe and Rachel you've been speaking at the London climate action week conference earlier this week. I think that's right. We were yeah, absolutely, you know what it was really in and we're speaking at every second act event and there was such a broad spectrum in the audience was at the Chloe it was actually quite good fun for us to go and speak in a really different environment as much as we absolutely. Relish the opportunity of speaking with the mortgage family as much as possible. Speaking to so many techies is probably very similar to what Danielle's experiencing with the power project is you're beginning to try to get a different parts of the industry across housing more broadly as opposed to finance which which just makes for for a fun day out really golden and a nice audience to engage with so it was very enjoyable very worthwhile event and it's great to get people together and talking about. Climate and climate change more broadly. Well, if it's a fun day out please invite me next time because I'd very much like to be there i'm getting more and more into this topic myself it's probably something that I've only really started reading about in the last. I can say it's six to 12 months. I suppose I'm at a different end of the market now if you like. But it is increasingly interesting and it's increasingly obvious what a big part this has got to play in the future not just the mortgage industry but the housing industry and the whole future of the country and effect. And it's evolving at such speed as well I would say at the moment that's something that's a lot of work going on below the surface with a lot of companies and I think next year will be quite next I knew when we see things start to come out. Yeah, yeah, I think you're right. I don't want to do it i'm going to throw a nice open question just to begin our discussion because it's a bit of it will help people understand a bit of the big picture first so if I were just to ask you all what do you see as the key issues with the UK housing stock right now. I don't want to pick that up. I don't mind. I mean, that I'll first think well we know that there's varied reports on climate change and carbon emissions across properties, but we know that roughly depending on which report you read 15 to 20% of all of the UK. carbon emissions come from our housing stock, which is just over what we see from cars and you think we talk a lot, don't we as a as a population around what we get from cars on the road and let the less so about what's emitted by buildings we the government has signed a pledge to committed to getting to net zero by 2050. So it includes significant investment in our leaky housing stock of oldest housing stock in Europe as it's aimed to be about 250 billion pounds of investment is needed in your housing and that's not a some of money that can come from the government alone so we need private sector finance to try and plug that gap and support homeowners to really to really move in the direction of decarbonising their homes. And to answer your question more broadly, there are quite a few key issues with our UK housing stock, but not once they're unable to fix. No, and I think as well, the main source of heat in most homes and in the UK is gas and gas can never be carbon neutral. So I think there's long term, if you look further down the line, there's that electrification of heat that's got to come and that's a big change in consumer behavior as well. Is that the other aspect about that I think is going to be the main transition. Yeah, and I would also say a particular challenge for the UK is actually the very decentralized ownership structure of our housing stock because you know if you think about countries where the majority of people rent and not only they rent but the private rent sector is very institutionalized is heavily regulated. There can be that you don't have to engage with quite so many stateholders to be able to kind of effects large scale change in terms of retrofitting you can retrofit a whole housing estate or a whole building. Whereas, you know, two and three of the homes that don't meet the EPC. I'm going into jargon mode now energy performance certificate rating or C or above. You know, two and three of those inefficient homes are owner occupied and also in the private rented sector alone. Again, two and three homes don't meet that standard. So if we put aside for a moment the fact that an EPC see isn't even a guarantee of. an efficient home in the first place. The mass of homes that are below that standard are owned by individuals. And so we're going to have to kind of almost convince change hearts and minds one household or one landlord at a time, which is why I think the broker role in this is absolutely key and the role of the wider market. So again, just playing a little bit devil's advocate here, you've spoken about that EPC rating of C or above. Why is C or above? Why is that the relevant standard? What is that actually for? What's the purpose of saying it's going to be C or above? Well, so I guess I suppose an EPC of C, well EPC rating, it wasn't really originally designed to be a measure of carbon footprint of carbon emissions at home. It was more about the efficiency from a cost saving point of view. So it's being used as a proxy because it's kind of the best thing that we have, but there are a lot of talks in climate scenes, I believe the government to see how we can reform the system or within the market are there other proxies that we can use. So yeah, we're having to move forward to the system, but at the same time we shouldn't wait for perfection to. No, I agree with that completely, that the EPC is definitely not the right tool to be used, but it's the best of what we've got. And I think the EPC say the way that we view it is that's getting the property to have all the fabric first improvements carried out would hopefully get you to that level. So you have all your insulation done and you would expect to be at an EPC say, because as we know, EPCs won't recommend at the moment things like electrification of heat and some instances because of the date that feed's in with and those flaws that Chloe alluded to. So as you say, it's the best of, it's the best of what we got because it measures the energy efficiency at least of the home, even if it doesn't actually measure, for example, the emissions. So it doesn't, it doesn't, it doesn't make any guarantees about how carbon efficient it is. It just makes them some form of some form of a starting point. Yeah, it's a starting point. Okay, yeah, that's fair enough, that makes sense. And I think I'm right in saying that there are certain rules around the rented sector and what you're going to have to and when you've got to achieve these EPC ratings by in order to be able to either rent a home out as new or continue to rent a home out, that's already been rented out. And that's going to be linked to EPCs. Yes, correct. Okay, okay. And hopefully most people who are listening to this podcast are already aware of that as well, but it is important. It is important. If you're not just going to have Google minimum energy efficiency standards for bi-to-let properties and then you'll find all of the dates. Yeah, just one interesting observation. I actually, I was looking up the EPC rating of my own house just a couple of weeks ago and my house doesn't have a current EPC rating because it hasn't been assessed since 2007. I moved in in 2009. Obviously, the EPC rating's only last for 10 years. The EPC rating that I expired back in 2017 was a rating of C. Interestingly enough, according to the government website, the most I can achieve is an EPC rating of C, probably because of the age of my house. It's just over 100 years old. And I think that's something that again, you know, people can you can aspire to do so much to EPC rating, but actually there is sometimes only so much you can do. And I believe there are some homes, for example, listed homes don't even have an EPC rating and aren't subject to the same rules. So again, it shows some of the flaws with the EPC rating system. Quite interesting. You know, I'll chip in here at the risk of the controversial goal. I think there's an interesting definition here between what we do in our industry and what the building sector does. And we know on the subject of EPC, we're all in agreement that, you know, they're not they're not being used for what they're originally designed for. They were designed to look at the cost of energy as opposed to the carbon emissions, but as a ploy really, really well highlighted, it's the best we've got. And with the weight for perfection, we've got to get to net zero in 27 years. We're just not going to not going to get there if we keep waiting for things to change. But I do think there's a important definition to go. This is how things are at the moment. It isn't how they will always be. And when it comes to mortgage advisors and mortgage brokers, I really don't want your audience listening and thinking, oh my goodness, this sounds like such a lot to get your head around, you know, listed buildings, heat pumps and thinking to know what I'm just going to disengage from that market. Because I'll be honest, there's a broker myself once upon a time. You've got enough on your plate. You're thinking about really broad range of topic. You're thinking about consumer duty, you're thinking about rates. You're just trying to keep on top of where things are going in this market, the main. And I think the kind of takeaway for me is a broker, I wouldn't be getting too lost in the detail of particular heating technology. Have enough of a knowledge to have a conversation and know when the right time is to hand that conversation off to a construction expert or a whole home surveyor or someone who can look at retrofit products. And I just wanted to call that out. So I do think that it could be a bit overwhelming to listen and think, you're lucky if a client says to me, I'm going to get to a PCB. I don't know where I'll even start talking about that. It's a guide at the moment. And the market we're using these things as guides, they're not particularly black and white. It is an interesting point there because I know, when I used to, I mean, a point in my career, I used to supervise, mortgage advisors. And one of the things I used to say to them is, you're not expected to know everything. You can't know everything about everything. What you are expected to know is who to ask, who to refer to, when to pass the, and that makes your point right, you know, there comes a point when you go, you need enough, you need sufficient knowledge to know that actually the right thing to do. It's a little bit like broad financial advice. As a mortgage advisor, you need to know, when do I need to pass this person over to a pensions expert? When do I need to pass this person over to a later life lending expert? When do I need to pass this person over to somebody who knows a little bit more about how to make a property more energy efficient and carbon neutral than I know about? So I think that's a very fair point. The other thing you've done there Rachel is you've anticipated one of my questions later on in the. That's fine. I'm really out-intended. I'm really out-intended there, Gordon. But as you mentioned, the kind of knowledge and information, I'll take the opportunity to highlight those are the key things that were in front of mind when designing the Bogohamber. We put that together in conjunction with the Association of Morgadian intermediaries, of course Chloe and the wider team at Amy, the Building Society's Association, the Energy Savings Trust, the Equity Release Council, Energy Morgadian Club, Morgadian Climate Action Group, Imla, Intermediate Morgadian Dissociation and UK Finance. I'm going to give myself points there to get rid of. Can you just remind me who it's CPD accredited by as well? Absolutely. CPD accredited by the Institute of Banking and Finance and we are incredibly grateful for that accreditation. And do you know what? So many people come up to me at events and stop me and say, "Do you know what? That's a really useful guide." And it's six or two pages. There's a cover, there's two covers included in that. So let's say six or six pages of content. And I would really use that kind of. It's not heavy though. No, it's not heavy. Well, thank you. And also it's really useful for a quick control left. You know, just a quick dump of where you can go for information to go. Do you know what my clients asked me something about solar panels? Where can I just get a snippet of information that I know is reliable and credible? So I'd probably recommend it because haven't had the chance to go and have a skin through. Save it, save it, save it as a link in your desktop. And I have that as a reference point. And I clothe you have heavily involved in the production of that before. I joined the GFI. So feel free to add in anything from your point of view as well. Well, no, I think you've summed it up really. It is a reference manual and it provides a bit of a foundation for the education journey that we hope, because we're going to be going on. But we know that there's still more work to do. And building on what we were saying about the role brokers can play in all of this. I would say a big factor of it as well as behaviour change and encouraging to be just planting the seeds in the mind about what consumers can be doing to bring down their energy bills. So while worrying too much about EPCs, you can get a smart meter and actually see how much energy you're using and run experiments in your home and see what uses less or like when if you can use it at certain times where the demand is slower and get lower costs, things like that. But also changes like energy efficient light bulbs or bring TBRs on the radiators and boil down the back of the radiator. And we don't want brokers to be experts in energy efficiency. We're not expecting that. But these are such small little tips that there's really no consequence in opening up that conversation. And I think the the reticence we're seeing at the moment amongst brokers and even broaching this topic is the fact that there's not a lot of product development out there. So there's a fear of I don't want to raise the subject and be like, yeah, yeah, great conversation. Yeah, I haven't got any recommendations for you though. And it's it feels a bit of a dead end. So we're trying to encourage brokers to break that in pass and just start having the conversations like you would with your friend in the pub. It doesn't have to lead to recommendation now. I mean, let's face it we're in a cost of living crisis. A lot of people want to be in a position now to get solar panels. But maybe if you have a conversation today, then maybe in five years time when they come to remorgage, they are in that better position. They've got more housing at the tea and actually there's more lender innovation, there's more product choice and you've created that demand and we're not going to see that innovation unless we start creating the demand now and that's start to the awareness. - Mr. Echo, Chloe's point. Sorry, Gordon. - No, you're fine, you're career. - I think that, again, part of being an advisor in that conversation is you're planting the seed that you're able to have a conversation about finance for retrofit. And if your customers don't, if you don't flag it and they don't know it. And then your clients potentially going off and googling home loans or googling for, you know, the most local retrofit provider and kind of wandering on and finding whatever finance they want to find, which might be the appropriate, the appropriate action for them anyway, unsecured might be a better option depending on the customer's circumstances. But I think as long as you're flagging that actually if you're thinking about retrofitting your home as a mortgage advisor, you can probably help you do something or can at least have a conversation with you about it. You might be speaking to your customers about something that they didn't even know you offered as a service and we talk about that when we talk about life insurance and other things. And if you don't flag to your customers, you do it. They don't know it. - No, no, you're absolutely right. - And I think it's partly for the sorry, they're gone. And I think it's partly for the natural journey when you give an advice and you go through the affordability with the customer, that's a great point to then talk to them and open up the conversation about especially with the cost of living crisis as well. So I agree with that point definitely. - Yeah, I think, I mean, I was going to ask 'cause there's a couple of questions you've sort of anticipated. So first one I think we've sort of covered but maybe it's not in as much detail. How, where do you think most consumers are of the issues? So we've been talking about educating brokers but what about the consumers themselves right at the front end? Do you think they know that we're in a housing, you know, we're in a crisis in terms of? - I mean, I honestly don't think that if you talk and friends or talk down the pub, we wouldn't have a clue about the what's got to happen with the UK housing stock over the next sort of 27 years. And some would be horrified if you told them or they'll be electrification of heat and things are going to change drastically. And I think there's got to be a huge UK-wide awareness campaign that has to happen to support this transition. And the key thing for me is that it's got to be uniformed. What the message that we're given from all sectors has to be the same message and it has to be simple. And it's improve the fabric of your home, insulate and consider the things that you can do to improve your energy efficiency and eventually electrification of heat or comb. And I think that would just need to keep it really simple and all we say in the same thing. - Sure. - Just to pick up on that point. And you're on about the consumer demand point. I like my own quoting, they've definitely said it on a public webinar before. So I think I'm not, I think I'm mistaking, mistaking. These building society did a piece of research into where you'd go to find advice for things like sustainability. And worryingly among a certain demographic TikTok came out as the first place you'd go and look for financial advice for your very fitting. And we laugh about it because we work in the industry. But you know, this is the next generation of first-time buyers. This is the demographic of homeowners that we need to be reaching as an industry. So although we're seeing that there's, the demand is there, but it's very nascent. We are seeing in other industries, things like social consciousness and environmental purpose really becoming more significant drivers in buying choices. And you look now, if you were to compare adverts on the TV now to adverts that you saw five years ago, brands from really well-known household brands are beginning to talk about sustainability. I've been going to talk about the fact that they've cut plastic in their packaging. And I'm trying to win hearts and minds in that way. So I think we are seeing a real shift in consumer behaviour and people willing to spend a little bit more money if it means they know that they're not, you know, contributing to global warming and they're acting in a more environmentally friendly way. So we are seeing that shift in areas probably more broadly than in financial services. I think as well, you know, on the panel yesterday of one of our co-panelists, Trudy Wolf, you know, talk, filling a signal is happening in the surveying sector. And saying that actually you are starting to see the energy efficiency of a home and the EPC rating coming up as a priority or in the priority list for the home buyers. And that's something that maybe two or three years ago would have just fallen off the radar if more concerned about school proximity and Wi-Fi coverage and things like that. So I think as soon as this starts to actually impact property prices and buyers' perceptions of value based on how energy efficient a home is, then that's really then going to have to start with being reflected in the valuations process and by an intern, maybe in the underwriting process, some of your affordability and what your expected bills are. So this is more just going to become the future, it's going to encroach into the mainstream, rather than being kind of a niche, being able to have your mainstream mortgages and your green mortgages. I think this is the direction of travel that it's going to become just part of everything. - Yeah, yeah, I think it's a good point. I think the interesting thing, what you were saying about potentially valuations, the other area can affect this marketability. And I think that's probably almost before it will start affecting valuations. It'll almost be like, yes, doing certain things to your home. We know this with home improvements anyway. There are certain things you can do to your home, which have no impact whatsoever on the actual value or what you can sell it for if you can sell it, but has a significant impact on the speed with which you can sell it. And at the moment, that's probably for those people who are trying to sell their homes. I'm certainly seeing evidence in my locality that houses which were selling inside for weeks are now taking four months, six months, plus to sell. And I'm sure that's a country wide picture. I'm sure that's something you're all experiencing in your locality's as well. So yeah, quite an interesting one. So going back to that, we all need to be speaking from the same song sheet, which I think was a point Danielle made at the start. Who is going to do this education of the consumers? 'Cause obviously we can say mortgage advisors broke us, have a part to play in this, but who else brought outside of our industry? Who else is going to give these key messages? - Think when we speak about this. I'm, you know, we've currently home all the time, so I'm not going to get lovely Kevin a plaque from Ellen G that says country not club, but it's always felt like I must direct, but I'm actually quoted to him so no one thinks it was my idea. And I think that applies to green in our industry, but also more broadly, we talk a bit in sustainability about this kind of carrot and stick approach. So I'm going to speak completely hypothetical here, but let's imagine that minimum energy efficiency standards came in for residential properties as well as by select properties. That's obviously a regulatory drive. If your house became unsellerable in this, I'm, again, please don't think I'm crystal-borne, heaks I'm not, and just coming up with theoretical. So we should probably English. - It's probably, yeah. - It's quite completely incredible. - Yes, just before I commit to everything and scare the whole industry in one podcast and swiftly find myself a move from the industry for life. (laughing) - I've never had that impact on a podcast before, so it'd be interesting. - You know what? Yeah, absolutely. I want to go down. And so let's assume there's some pretty harsh regulatory penalties across let's say, lenders and homeowners and landlords. But then let's also assume that there's some more governmental levers that put on a carrot, if you will. So you might see things like energy adjusted stamp duty or maybe we'd see councillor, I'm going to make this up on the spot. Council tax adjusted. Maybe we'd see other things from a more local sovereignty level or more from a governmental level. My firm belief as it stands at the moment, and I absolutely with that reserve, the right to change my mind at a late-to-date, but belief as it stands at the moment is that finance is not the driver. And by that I mean, you don't often get someone combusting through your doors as mortgage advice again. I've seen this really wonderful rate, and I'm going to go buy a house, because I've seen the rate, the rate is just great, so I'm going to buy the house. You see people come in and say, "I want to buy this house, what mortgage can you get me?" And if we apply that same approach to green and sustainability, there'll be an outcome. People will come with a driver who I want to green up my house. I want to make my house more energy efficient for a wide variety of reasons. Maybe that's securing your asset value as the market begins to shift, which we hope it does slowly, not fast as we'll create a second issue with stranded assets that we've talked about for a lot longer than we've got on this podcast. Maybe it's because they want to make their house more enjoyable to live in, and there's a huge amount of reports out there around the cost of saving to the NHS for more environmentally friendly properties. So lots of different drivers. And what finance must do, and what our sector must do really well, is make sure that we enable that market, that we're there when the customers come calling and say, we're ready, we know we need to do something, we're able to give good guidance. I'm not using the word guidance, not advice. We give good guidance on where to go for credible advice, on home fitting, we wouldn't tell people which kitchen device, we definitely shouldn't be telling people what to do in that respect either. But also that we're able to give really good advice on financial products, really good advice on what serves them, and the products are there, and essentially, that's what my job is, it's to make sure that when the demand is there, there are the finance products available that sit alongside that, and I can see Danielle nodding along, which you can't hear on the podcast. So, and you can't. And since Danielle's doing so, I'll hand over to you. Well, I was going to ask a question, which I'll link to that directly for you, Danielle. So, what more can be done to develop the range and quality of what we loosely call green finance products, and how do we ensure these are paper purpose? So, I think we'll firstly have to recognise that as banks, as Rachel and I do, she we aren't expert in decarbonising the home either, and it's to set up i'r gwybod y pyrddu yw i'r bod y gweithio syddio'r gwybod yw gweithio, fel ei gwybod yw'r ymddor. Mae'r pyrddu yn dŵwch yn ddawn i'r gweld syddio'r gweld syddio'r gweld syddio. Mae'r pyrddu yn ddawn i'r gweld siwr wrthau i dydru. Mae'r gweld syddio'r gweld siwr gwybod syddio. Mae'r gweld siwr gweithio'r gweld siwr gweithio. Mae'r gweld siwr gwybod siwr gweithio. Mae'r gweld siwr gweithio syddio'r gweld siwr gweithio syddio'r gweld siwr gweithio. Mae'r gweld siwr gweithio. ym yn ddig羽giet r்ytont gw 왓 yn yn gimag ratefus a fe gwrsftol meithefyd donating. A' ddim eich fymp nhwpenni, ac ym varhadau amser amwer i dyddolda Aeg哦gaf yja. endiad cod yn ddyg fer un gweldcusай'n jennu bod ynael- ig Bed woll crossbowad. Mae bobl arvalue ar lefeg ondysol gan wneud cynd defeation. ann [Gloeddwch] deneg ryft rosa to honour Dear to be aeibu oedden o'n dewch chi'n gwneud. Mae'n gweithio'r fwy oedden o'n gwneud, o'n gwneud ymwch chi'n gweithio. Mae'n gweithio'r ymwch chi'n gwneud i'n gweithio. Mae'n gweithio'r ymwch chi'n gweithio. Mae'n gweithio'r ymwch chi'n gweithio'r ymwch chi'n gweithio'r ymwch chi'n gweithio'r ymwch chi'n gweithio. Mae'n gweithio'r ymwch chi'n gweithio'r ymwch chi'n gweithio'r ymwch chi'n gweithio. In the broker and lender sectors, who want to basically come together to create resources, to create knowledge to form, we've just set up a series of working groups to kind of discuss issues like setting standards and you know how we can talk about issues like greenwashing and the compliance implications. So all of that is for the benefits of making sure that we can you know going back to this single version of the truth, seeing even the same chemistry inserts stock phase here. But yeah that's now something that has become actually the official steering group or the Association of Mortgage and Tobageers Green Initiative. Can I just ask a question and so Lady Rachel particularly were talking earlier about the fantastic tool that's been produced to support brokers so the Green Finance, Morgan Broker's handbook, if it's correct title is I apologize for that. Is there any is there any proposal to develop something similar for the consumers? You know I look at that and go actually you know what as if I were a broker I'd I'd almost want and I know I'm not supposed to so I'm not encouraging that but I'd almost want to be able to share some of that content because it is written in a language that Joe public can understand so are we looking to develop something similar. So it's a really good question and one that is is widely debated so where does this information for consumers come from and there's an element here of car before horse and which around this should come. We need to get really good information out of consumers does that fall to kind of coming from a government level is does that become from a you know we've got fantastic resources out there at the moment like energy saving is just et cetera but kind of wholesale how do we get that out there but don't think. We're doing a whole country leaf drop is quite in spirit of green and sustainability monest but does that does that come from the GFI so we were created essentially to sit between public and private sector to mobilize finance. I think if we go right back to if we were moment what to flood the market with loads of consumer information. So much to Chloe's point earlier where's the road going right where's the road going and if there aren't the finance products at the moment and there aren't the mechanisms to support homeowners in this transition. The last thing we want to do as a country is have another spray phone disaster where people are getting the wrong end stick going and spray for them and then for anyone who's not afraid with the situation potentially end up with an unmoggedable property and have significant cost taking out and that's that's a very sad extreme. We'll be really mindful in how we approach this as an industry make sure that moment what we do know is this is coming to the track we do know that demand is coming we do know that we need to have a role to just support the industry has a role to support mortgage brokers who are having those conversations really early on. We don't want to jump the gun and tell everyone in the country to go and get a heat pump a there's no supply. I mean we'd love to tell the whole country to go and get a heat pump I should say before I get sound about it saying that we need to make sure that there's you know ampers supply ampere finance models and that's what the work that the three of us on the call and hundreds if not thousands more you know across the industry are doing is making sure that when this demand comes. There was a really good customer journey that sits behind that that makes sure that we're able to support those customers and finance them it's a long answer to the question but I think it's not as simple as how do we go out mass educate we need to think about the infrastructure that sits behind that as well. Yeah I also think that lenders need to have in the back of the mind what's the trajectory look like from the government perspective so the government is set targets on heat pumps set targets on fabric first improvements and it's one of the things that we looked at when set now one internal targets is okay if we try to say are we're going to get 60,000 customers to install heat pumps that's no any what the target is for the government so we need to make sure that our internal targets are aligned with that trajectory. And otherwise we're just not going to get there we're going to be focusing our attention on the wrong thing at the wrong time I think the other thing that what you were just saying that made me think about Daniel is that over the years I've seen many many business plans which consist of aspirational targets this is what we're going to achieve and actually the road map for getting there so so so well and good again you go back to the government would just say in the in the wider piece the government might have these aspirational targets. But the government needs to give us some guidance give the industry give the broader industry some guidance how is it we're actually going to get to those targets because you don't achieve a target simply by having a target you have to have a plan that gets you there. So what was the challenge I suppose the other thing at the moment is we you know we've got some interesting additional challenges within the industry so you know we've got a cost of living crisis call it that we've got interest rates. Higher than they've been for many many years and I just wonder you know we got things that consumer duty and due to be introduced and next month. What what impact of those things have particularly on the brokers who are trying to you know got to give the best advice they can how do those things impact on their ability to be able to talk about these these really really important improvements to people's homes. Yeah I mean I think that's something there's a huge agenda point for Amy because the layering of regulation and regulatory creep is a real concern firms are constantly seeing we're seeing a spate of new consultations and it's all it's great that there's ambition to keep improving financial services sector. But I think one of the things that we push back on a lot with the FCA is that there's not a lot of big picture thinking in how all of these different regimes fit together a R regime that's been taught of reforming senior managers certification racing. ESG consultation that came out was so ambitious that it almost tried to solve all the world's problems in one kind of set of ideas and it was including diversity inclusion and sustainability and nature in the environment net zero and it's it's kind of that that comes a point where you have to prioritize and as you said you know that these things are having targets and having you know they would compose have board champions like we have a consumer duty board champions for ESG. One the idea of having sustainability and D&I in the same remit is so huge that it's I don't think that would be workable. But to you know if we target the wrong things anything that you measure is you know is the thing that you're going to get so you really got to be careful what you measure and what you target. You know what to prioritize what we would hate to see is firms prioritising quick wins or peripheral kind of objectives that would be nice to have over the real meaty stuff of just getting people to reduce the carbon book prints for homes you know and it's great if an office stops printing and changes it's like balls and you know by some carbon offset or something. I think it would be more impactful to have a really solid as Rachel says a consumer journey with your green advice more green more with advice process. and really help real world people to upgrade their homes. - So I suppose that just, Daniel, that sort of just links a question back to me, which is, so when you are looking at your role is looking at products, if you like, and ensuring the development of suitable green finance products, alongside that I'm just wondering, so what about how do we ensure that the process is that run alongside those products, the advice processes are suitable as well and appropriate. And presumably that's not something you look at, that's a different part of the business, if you like, is it? - It is, but I think it's part of any product development, 90% of our business construction to me just comes from the programme market. So we involve them in product development process, we get there input, we get them involved in that journey as well, and it's part of the sort of product development, we invite them to come along and give us feedback on what we're doing, and that's something that we'll continue to do, and certainly with the project power, we've been speaking to the industry a lot about what we're proposing to do, we've been to the mortgage advisor event, London where we spoke to brokers face to face, to get their feedback and understand what their expectations are and how we can support them in any product that we design and then how they go and advise on it. - Yeah, and I think that's absolutely got to be the right approach 'cause you cannot, we can't work in silos, we've got to think about the whole, again, I'm thinking back to consumer duty, one of the things about consumer duty is that we have to consider the whole product journey from development right through to distribution and everything in between. So, yes, that's the-- - And the outcome, too, as well, I think that's something that's really key, that's a difference from every regulatory regime that's gone before, and was one of the things the SCA pulled out in their Green Mortgage speech when they said, "You've got to be looking at, "if you're selling a Green Mortgage looking back, "you know, years later, "when that maybe the further advance "or the new mortgage product has been used "to finance Green Home Upgrades, "actually looking at those outcomes "and was the money used as intended?" And I think being able to monitor that is, it's allowing-- it's supporting customers to meet their objectives, but also avoiding causing foreseeable harm. So there is the other hand of that, and I think Rachel was mentioning this earlier about, your clients need to be aware that if they do want to do anything to their home, you should probably know about it as a mortgage advisor, just 'cause you don't want to recommend them a product that shuts doors for them. Even if you don't have a product that's going to facilitate everything, you at least don't want to recommend the product that's going to sort of tie them into a fixed rate of prevents them from getting a further advance. And when they told you, if I find sage, yeah, I'd like to go off grid and have an eco-home and things. That's a case, so yeah, I nicked from a very good complied 'cause all people called Lee Coates, so I feel I should attribute him there for some, not my own idea, but he put that on the map for us in thinking, yeah, well for me, there's, you know, it's not just about goal-oriented and proactive action, it's some kind of about protection and preventing bad outcomes. - Yeah, and I think one of the things in, again, on project power when we've been working on the proposition is how do we measure that the product is what it's supposed to do, so the goals of the GHFAL that reduce as the emissions and the customer's homes of the customer buys the product. They expect that it's going to reduce the emissions, it's how do we prove that it's done that. And that's one of the things that we're bringing in is can we obtain access to smart metadata as a lender, 'cause we're currently listed as another user, it's a way that we can get that, that can evidence to say, we're not green-washing, we'll have it produced a product that said it was green and it's not, because we've got the evidence that shows that it's done what it said it would do. So that's, like I said, we'll speak to smart DCC and we'll hope that from an industry perspective, banks may be able to get some access to the meat data in some way to help improve that what we're developing is doing what it said it'll do. - Fabulous, fabulous. Some interesting challenges, I'm sure we could talk about these all afternoon, but we haven't really got all afternoon. I've got a last couple of questions. So first one, an appreciating Chloe, AME is a trade body, L-I-B-F professional body. What do you see our role as a professional body in helping the sector meet these various challenges? - So I would say the role of L-I-B-F in clay is really formalizing broker education around this and not only integrating it into your kind of qualifications that you offer, but making it central to the basic qualifications. So getting it in CMAP and to send the message that this is going to be an integral part of broker's roles for many years to come. So I think, you know, particularly for the younger generation to where at the start of their career, that this is going to become more and more pertinent to their role. So we're happy, we have already elaborated and been in open dialogue around this. So I'm sure we can develop further CPD resources, mortgage kind of action group in AME, and GFI all kind of working together to try and deliver their through educational resources. But it's, yes, it's a team effort. If you have anything to add there, Rachel. - Yeah, I think the things that this is well-glaued and I think Rachel and the advisor community that this isn't a massive mountain to plan. This is a small keyhole surgery to the existing advice they're giving. And I think keeping consistent with that messaging keeps us engaged with the broker market. I think if we start really over-coclocating this, we're just going to lose hearts and minds and people are this engaged. And that would be a massive shame. - Yeah, absolutely. I mean, I just want to say, for those of you listening to this that haven't seen the handbook that we've referred to through this, I only read it two, three weeks ago. And it is a fantastic tool. It is very, very simple. It will help with your education. You know, I'd like to think, you know, there's some CPD there. Now, CPD for mortgage advisors is not mandatory. We know that, however, I would just say to anybody out there who is not doing regular CPD. And CPD includes even listening to this. You know, listening to this podcast will hopefully give you some education. But if you're not doing regular CPD, I'd just question how you can possibly be acting in the best interests of your consumers all the time. So do take the time to read that handbook. It's a really easy read. And it's got some really interesting information in. And it's interesting, A, from a point of view of things that you can support your clients with. But also, from a very, very personal point of view, you might look at it and go, oh, quite a, is it that simple? I could do even small things. You know, some of the things you referenced earlier, like, you know, just changing to more energy efficient light bulbs, changing to a smart meter. And I have to say, I only changed to a smart meter last year. And it was, it was a bit of an eye-opener for me, but it was an even bigger eye-opener for my wife. Yeah. You get very conscious of it, don't you? Oh, my goodness. But don't we've gone away from looking at it daily now. I have to say, we've gone away from looking at it daily because now we know what the behaviors are. That will set it going, we mad. So, okay. And so, very last question for the day, which I want to address to all of you. And what progress do you realistically expect us? I want to say, boss, I mean, the very broad us to make over the next 12 months. What would be success in the next 12 months? Anybody got any initial views on that? So for me, it would be that we design and put to market a product that enables the uptake of Red Roll Fade. And that gets really good traction. I think it's got to be the success in it, and it does what it's supposed to do. So we can see that measurable reduction in emissions. And I would like to see the market flooded with them all lend us off from it. Sounds ambitious, but you've got to have ambitious plans. So that sounds good, okay? Fantastic. So for a product development point of view, to see lots of new products out there that are going to make a real difference in the next 12 months, measurable difference. Yeah. Fantastic. Success over the next 12 months, Gordon, for me would be, a couple of things, a local community are engaged, kind of wholesale with sustainability agenda and understand how that fits within their business. I think we are going to see some really exciting products come to market in the next 12 months at Echo. Echo, what Danielle said, I don't think it sounds that ambitious, actually, I think it's really exciting work going on across the industry. And more broadly than that progress would be that the narrative around Greenwater's comes away from, comes away from speaking about 10 basis points off the rate here or a bit of cash back here, because actually, do you know what, lenders are trying really hard and we're asking lenders to innovate into a market where there isn't an established customer demand. And as an industry, we really need to get behind our lenders and support them as they test and learn, support the market. See how they can use their own customer data to continue to innovate. And we are right on, if you imagine a massive ladder, and let's call that the Greenwater's, let ladder kind of 10, 15, 20 years from now assuming the Greenwater's is a no longer thing, because it's just the more beginning, it's kind of integrated into what we do. And I'm terribly out of the job, but I'll worry about that then. I think that if we picture this ladder of Greenwater's, we want the first rung of this ladder. There is so much room left to go when it comes to product design and product innovation and the great thing is that because we're thinking more broadly about product design. It gives brokers a really good opportunity to really add some value. You know, we've seen over the last five, 10 years, intermediate lending grow year after year after year. And now 80% of all mortgages in the UK are transacted by a mortgage intermediary and immersing yourself in this subject and understanding more about the niche products that are coming out from the end of and they will be quite different. And there won't be a standard to and far be a fix. They'll have different features to them that you're not used to giving advice on. That really does set you apart as an in mortgage advisor and really gives you an opportunity to deepen relationships and safeguard your relationship with that client for generations to come. So just would like to see that the next 12 months we really are on the road to understanding where advice fits into to green sustainability more broadly. Fabulous. Okay. Yeah, no, I'd hold the echo that and I think, you know, it's almost that's entirely the Amy message. So, you know, you're definitely on on brand there with the exact kind of things that we constantly have a catering for in terms of the value that brokers bring. It's a real opportunity to consolidate the value of advice and to demonstrate that because there is a bit of a risk here in that. If this happens into chaotic a fashion or people try and rush into this too quickly that particularly press release on lenders to improve the energy efficiency of their back books in a timeframe that's just unachievable. We could see the broker potentially cut out of the conversation, which is the last thing that we want because the market works so well currently. In terms of getting people a good deal and having them research shows that broker presence in the markets and keeps lenders competitive and brings down overall cost for borrowers. FCA research shows that on switching shows that you know, consumers are generally on the best deal and the fact of. You know, if you've got to treat your customer well, you want to expect them to come back in five years to do the remorage, you've got to get it right at the start. So there's real set of virtuous incentives in this market. We don't want to lose this. And so just for success for me in 12 months would look like the general feeling and general attitudes of in the kind of broker community would go from reticence and nervousness towards one of optimism and enthusiastic embracing of what what they say. This has to offer whether that looks like firms starting to really embed this into their training compliance processes. Or it means that you know, we've got some really good case studies of the advice journey that everybody can learn from. We've just really got everybody talking and made a big splash in sort of the trade press and we've. We've got people really thinking about this put it on the map as a key issue in this industry. That's that's what success would look like me. Fantastic, fantastic. I just want to link back to something Rachel you said you said about and I think it sort of sums up again. What Chloe's just sent about the broker market being engaged. All I would say is that if the broker market listens to people like the three of you ladies this afternoon, they cannot help but be engaged. They really should be because and I think that's the key thing about if you really want to engage people, it isn't just what you say. It's how you say it and it's who you get to say it and I've listened. Over the years I've been to many many industry events and I've listened to some fantastic messages being poorly delivered. But what I've heard this afternoon is a really, really positive message being really well delivered by three people who are so passionate about their part of the industry and it's fantastic to hear. I just challenge anybody not to be engaged if they listen to the three of you. So thank you so much for that. I really do appreciate it. Thank you Gordon. Thank you very much. No, that's that's quite all right. I feel like I do need to wrap up for this afternoon because we've taken up nearly an hour and I appreciate people listening to this might have might have been spending their lunch break or might be doing something else. I think I have another appointment to get to somebody else that they need to educate another consumer they need to educate and advise. But thank you all very much for your time this afternoon. I have really enjoyed the discussion and I'm sure that over the next few months we will have some more specific areas of this to talk about. Be great to follow this up during the course of the rest of the year. And look at what is actually achieved over the next 12 months. Oh, I didn't know as you were going to hold us to it. Absolutely come back. It's absolutely. I've got to actually do it now. Have a way. We're on the laptop. It's having said that's what we want to achieve. Absolutely. Absolutely. And I'll put myself on the record as saying if there's anything that we can do to support you know at the LRBF and if you want me to attend any of your events and to help talk to any of your members, then I'll be more than happy to do so. Absolutely. Take you up on that as a whole. Thank you very much. That's brilliant. Ladies, thank you so much. Listeners, thank you very much for sticking with us. I hope you've enjoyed this month's podcast. Another edition will be recorded sometime towards the end of July. In the meantime, those of you going off on holiday, I hope you have a fantastic break and we will catch up again very soon. Thank you very much from the LRBF. Thanks for listening. If you'd like to find out more about our qualifications, training and upcoming events, then go to lrbf.ac.uk. We also have other podcast channels that dive into topics like trade finance, financial advice, fintech and more. You can find all of them at lrbf.ac.uk/podcasts