Abstract
Decarbonising the housing stock depends on households investing in energy upgrades, but the upfront cost prevents many from doing so. Property-linked finance (PLF) offers one possible response: repayment obligations attach to the property rather than the borrower, allowing households to spread the cost over time. Whether households would in fact choose it over a bank loan, a personal loan, or a mortgage top-up remains an open question, and it is the question this study sets out to answer.
The research proceeds in two stages. We began with focus groups among homeowners, landlords, and prospective buyers to understand how people reason through the decision to finance an upgrade, and used these insights to design a discrete choice experiment (DCE). Several themes emerged. Households turn to their own savings first, and consider borrowing mainly when savings will not cover the cost. PLF's particular structure addresses the concerns of some households but not others, with its appeal varying across segments. The scale of the upgrade also proves important: above a certain cost, financing enters consideration in a way it does not for smaller projects. Landlords and tenants, for their part, interpret the rental situation quite differently, a divergence that shapes where PLF might gain traction in that market.
The DCE builds on these findings, comparing PLF against its alternatives across housing segments. We will show which options households choose, what drives those choices, and what this means for designing finance that supports household investment in energy upgrades.