Buyers of eligible Octopus Energy Zero Bills homes could borrow up to £30,000 more after Santander changed how it assesses their mortgage affordability.
The bank will remove household energy costs from its affordability calculation when customers purchase qualifying new-build homes covered by a 10-year Zero Bills guarantee.
Santander says the change could materially increase purchasing power, with a buyer acquiring a five-bedroom family home potentially able to borrow £30,000 more than under its standard assessment.
The development gives housebuilders and new-build agents another selling point for energy-efficient properties by linking lower running costs directly to mortgage capacity.
LOWER OUTGOINGS
Octopus Zero Bills homes are constructed with solar panels, battery storage and a heat pump, alongside energy-efficiency measures.
Customers pay no standing charge or home energy costs for five or 10 years, provided the property and household continue to meet the tariff’s eligibility requirements.
The guarantee is subject to a fair-use allowance. Electricity consumed above the allowance is charged separately, while electric vehicle charging is not included.
Santander is the first major high street bank to formally recognise the scheme’s reduced household outgoings within its mortgage affordability assessment.
Sean Pape, Head of Homes Propositions at Santander UK, says: “As the first major bank to recognise the benefits of Octopus Energy’s Zero Bills homes within our affordability assessment, we’re helping customers make the most of lower household outgoings when buying an eligible new-build home.
“By taking into account the 10-year Zero Bills guarantee from Octopus, this provides greater flexibility in the amount some customers are able to borrow, helping more people access homes that are designed to be energy efficient and more affordable to run.”
NEW-BUILD SALES
Octopus has approved more than 5,000 Zero Bills homes through partnerships covering private sale, shared ownership, affordable housing and private rent.
It is working with housebuilders including Barratt Redrow, which previously committed to delivering an initial 54 homes across developments in Bedfordshire and Gloucestershire.
Octopus aims to support 100,000 Zero Bills homes internationally by 2030.
Nigel Banks, Zero Bills Director at Octopus Energy, says: “Not all homes cost the same to live in, so they shouldn’t all be treated the same when it comes to mortgages.
“Zero Bills homes come with guaranteed no home energy bills, giving homeowners lower monthly outgoings from day one.
“This mortgage with Santander recognises that lower cost of living, helping more buyers to access cleaner, smarter homes.”
The enhanced affordability remains subject to Santander’s lending criteria and does not mean every applicant will receive an additional £30,000.
