Green mortgages are go

With a worryingly large number of Britons still not making the effort to recycle even their household waste, the very idea that environmental concerns would sway anyone when they are making the biggest financial decision of their lives may seem laughable.

However, driven as much by the current economic climate as by images of Polar Bears falling through melting ice, the market for 'green mortgages' within the UK is relatively strong and even prospering.

Indeed, such a desire among UK consumers to minimise their environmental impact, whether it be when buying a pint of milk or a house, has led to a significant proportion of lenders jumping onto the green bandwagon and offering products aimed at easing the the conscience as well as the strain on the wallet.

New research from mform suggests that around 39 firms offering mortgages in the UK market have now put into place strategies aimed at boosting their environmental performance, equivalent to 48 per cent of total lenders.

Furthermore, it's not just the big banks muscling into the niche sector in an effort to get their hands of the 'green pound'.

In fact, alongside the likes of Lloyds TSB, Halifax and Alliance & Leicester, smaller firms such as Furness, Newbury, Norwich & Peterborough and Newbury building societies have all emerged as the leading green lenders over recent months.

"A substantial number of mortgage lenders have taken significant steps to improve their environmental performance and are committed to continue to improve while trying to reduce or eliminate their carbon footprint," commented Eamon Rice, chief executive at mform.

Significantly, given that many green mortgages come with variable rates, the fact that borrowers have lost faith in fixed-rate products due to economic uncertainties triggered by the global credit crunch has given the once overlooked sector a welcome boost.

One West Yorkshire based lender, Ecology Building Society has cited this as a significant factor behind its record growth, with the firm having reported doubling its gross lending over 2007 in comparison to the previous year.

"Based on our recent performance I would say the market for truly green mortgages is growing," Ecology's marketing manager Jenny Irwin stated.

Furthermore, even if the global economy and the UK housing market benefits from an about turn in the near future, such a trend is unlikely to be affected, largely because the type of lender who goes in for a green mortgage is equally as influenced by personal ethics as they are by factors such as interest rates.

However, the outlook of Norwich & Peterborough, though less rosy, currently looks more reasonable.

Commenting on the likelihood of first-time buyers opting for a green mortgage, the building society's Spokeswoman Alison Rolls, said: "It would be nice to think that they put the environment more on their shopping list but at the moment it's a fact that it's all about rates and less about ethics."

For those on their second or third homes, however: the future's bright, the future's green.