The region has become the first in the UK to align with Green Home Finance Principles (GHFPs), launched by the Green Finance Institute (GFI) and the Loan Market Association (LMA). The principles comprise a framework of market standards and guidelines for a consistent and transparent method behind green home loans.
Announced by Andy Burnham, Mayor of the Greater Manchester Combined Authority (GMCA), five credit unions that are members of the Soundpound Group – a collective of 14 credit unions in Greater Manchester – will offer these loans.
South Manchester Credit Union was the first to launch a GHFP-aligned product with its green loan.
Metro Moneywise, Salford Credit Union, Manchester Credit Union, and No1 CopperPot are now also aligned to the GHFPs and working with local retrofit co-operative People Powered Retrofit.
Other members of the Soundpound group are expected to offer similar finance in due course.
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An unsecured green home loan is a specialised type of finance that helps homeowners fund energy-efficiency and green home improvements. The loans typically range from £500 to £15,000 and are repaid over shorter terms than mortgage finance, usually around five years.
The shorter borrowing period aims to reduce the cost of finance.
Making greener homes a reality
Burnham said: “The Soundpound and their members will be playing an important role in modernising our built environment to support the local economy while cutting energy bills.
“As part of our mission to become carbon neutral by 2038, we’re investing in cleaner, warmer and healthier buildings, modernising homes, public spaces, and workplaces while creating thousands of new green jobs across Greater Manchester. By aligning with the Green Home Finance Principles, co-developed by the GFI and LMA, our credit unions are creating a greenprint, leading the way and fulfilling a critical function in making greener homes a reality for more people.”
Ciara Davies, CEO of Metro Moneywise and executive lead of Soundpound, added: “As more Soundpound group members offer unsecured green home loans aligned with the Green Home Finance Principles, we are building the kind of local coverage that makes fair, affordable retrofit finance truly accessible. With the support of the GFI’s Green Home Finance Principles, Soundpound members are helping to set a transparent, integrity-driven example for the market.
“This is about offering people in the GMCA community-level support, helping them modernise their own homes, on their own terms.”
Rhian-Mari Thomas, chief executive at the GFI, who brought the credit unions together under the GHFP umbrella, said: “GMCA’s credit unions are community-rooted, values-driven, and trusted by the people they serve.
“Credit unions are uniquely placed to innovate faster than other lenders, which makes them the perfect first-mover for GHFP-aligned unsecured green loans. GMCA’s local leadership should inspire other regions to harness the power of community to mobilise capital into homes to finance a healthier, affordable and resilient built environment.