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Green mortgage market stabilises

New products within the green mortgages market are not likely to emerge from fresh entrants to the sector in light of the credit crunch.

That is according to Moneyfacts, which says that it is unlikely that new providers will emerge on to the scene to begin offering products because of the scarcity of credit between institutions.

Instead, it would be those mortgage providers which were in the market for their ethical profile who would be continuing their existing products.

Moneyfacts head of mortgages Darren Cook explained the background.

"The emphasis at the moment is on the underwriting and a healthy lending book… Lenders are looking at LTVs, and their criteria and so forth, to protect their lending book," he said.

"So the lenders who are in the [green mortgage] marketplace at the moment will probably continue, but I don't think there's going to be a big [move] towards additions to the market."

However, he was positive about the level of demand in the sector, saying there was "interest in the marketplace" and a clear level of demand from consumers.

Green mortgages typically involve companies offering 'green' bonuses – such as planting trees in return or donating money to carbon offsetting charities.

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