The Equity Release Council has published new guidance for member firms to consider when launching retrofit lifetime mortgages.

In consultation with the Green Finance Institute (GFI) and Council members, the guidance has been designed to support product development and act as a starting point for broader discussion within the industry.

The Council said it hopes that the guidance will “help move the conversation on green home finance forward”.

Within the guidance, the Council has proposed a customer journey for the process of taking out a retrofit lifetime mortgage. This differs from the traditional lifetime mortgage journey with the addition of an initial retrofit assessment, and a retrofit coordinator, to support the validation of the completed works to deliver intended carbon reductions.

The Council stated that these extra steps are designed to “safeguard the customer” and to “ensure that all green property improvements meet high standards”.

“We hope that the guidance we’ve outlined can help to accelerate efforts to innovate in the later life mortgage market and deliver a decarbonised housing market which future generations will benefit from,” commented head of risk, policy and compliance at the Equity Release Council, Kelly Melville-Kelly.

“It is essential that we all play our part to reduce the carbon footprint of our homes and retrofit the UK’s ageing housing stock. As well as reducing carbon emissions, using equity release to make green home improvements can also lower customers energy bills, future-proof their home and even add value.

“Within the guidance we have also outlined example best practice for the industry and a proposed customer journey, to ensure that the necessary expertise and advice is given to customers throughout the process.”

Both the Council and the GFI are encouraging equity release lenders to review the new guidance and use the information to “guide the establishment of propositions” or “add to current conversations” they are having on the development of retrofit products.

Associate director for built environment at the GFI, Rachael Hunnisett, added: “We have worked closely with the Council to develop its retrofitting standards, closely mirroring the GFI’s Green Home Finance Principles which provide integrity to the green home finance market.

“By working together, we ensure consistency across the market and a focus on driving private capital towards solving the UK’s £250bn funding gap for improving the energy efficiency of homes.”

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