Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Gen H Updates Affordability Model for Energy-Efficient New Builds

Gen H, a residential mortgage lender, has updated its affordability assessment model to allow buyers of new-build homes to borrow more. The change is based on lower living cost assumptions for very energy-efficient properties.

According to Gen H, the revised affordability calculation reflects the lower energy costs typically associated with homes that have higher Energy Performance Certificate (EPC) ratings. New-build homes are generally more energy efficient than older properties, which can result in lower monthly household energy bills.

By incorporating these expected savings into its affordability calculations, Gen H stated that eligible applicants purchasing new-build homes may now qualify for higher borrowing amounts than under its standard lending model. The lender said this approach aims to better reflect the real-world cost of homeownership.

Gen H noted that while the increase in borrowing capacity may be modest, it could help buyers who are close to affordability thresholds secure a property that might otherwise be out of reach. The update comes as lenders continue to explore ways of recognising the financial benefits of energy-efficient homes, especially as buyers face ongoing affordability pressures and higher living costs.

By taking reduced energy expenditure into account, Gen H’s updated model is designed to align lending assessments more closely with the ongoing costs associated with different types of housing.