The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

Landmark’s latest report, Reflections and Predictions for Sustainability in the Property Sector in 2025, explores amongst other things how the property finance sector is evolving in response to these pressures. While lenders may not be the primary drivers of change, they still have a crucial role to play in aligning financial decisions with sustainability goals. 

How lenders can support the transition

While regulation and consumer demand will ultimately drive systemic change, lenders can support more proactive progress in several ways: 

1. Strengthening climate risk assessments

Lenders can integrate sustainability metrics into their risk assessments, ensuring that climate risks are properly factored into lending decisions. By embedding environmental, social, and governance (ESG) principles into underwriting criteria, they can improve the resilience of their loan portfolios while supporting the transition to a more sustainable property market. 

2. Expanding green mortgage offerings

Green mortgages provide financial incentives for buyers to choose energy-efficient properties, but uptake remains limited. One of the ways that lenders can increase demand is by working closely with policymakers to develop stronger incentives, such as lower interest rates or tax benefits for energy-efficient homes. 

3. Strengthening industry collaboration

One of the most significant successes in the past year has been the increase in collaboration across the mortgage sector. Industry bodies, such as UK Finance’s Sustainability Committee, are bringing lenders together to develop a unified approach to sustainability challenges. Sharing knowledge and best practices is key to driving meaningful change across the sector. 

Challenges in scaling green finance

Despite progress, several barriers remain:

A look ahead: the future of green finance

So, what can be done to accelerate the transition to a more sustainable property market?

Creating urgency around climate action

At present, climate reporting and green finance remain optional rather than mandatory. However, this is likely to change. Lenders who take a proactive approach to sustainability are likely to be better positioned for future regulatory shifts and evolving market expectations.

While the financial sector cannot drive the sustainability agenda alone, it can play a critical supporting role—by strengthening climate risk assessments, advocating for better reporting standards, and ensuring green finance is accessible, transparent, and commercially viable when consumer demand eventually takes off.