Published 07. Nov. 2018

Carefree Living: The Power of Personal Finance

Marcel Nijland, Strategist and Business Developer at Dutch Fintech Omniplan on the future impact of the ‘National Climate and Energy Agreement’ and its sustainability goals and the importance of Personal Finance.
Personal Finance

Our living spaces are a central part of our lives. We rent, we buy apartments, terraced houses, bungalows, semi-detached houses, houseboats and tiny houses. Home is where you grow older, where you see your children grow up, where you can relax after a busy day at the office or it may even be your office.

When we talk about ‘living’, we’re talking about more than just four walls and a roof. It’s about coming home, feeling at ease and knowing that everything is where it belongs.  So we’re not just talking about ‘living’, we’re really talking about ‘carefree living’. And that goes much further than just taking out or refinancing a mortgage.

Our homes need to match our personal preferences, but also meet the legal requirements around financing, foundations and sustainability.

Co-financing home sustainability requires concrete steps

The Dutch government has presented an ambitious plan to our country, with the goal of being energy neutral by 2030 and fully circular by 2050. Major steps still need to be taken to achieve those targets, particularly in the housing market. That’s why it’s important for financial institutions to start working seriously on sustainability and integrating it into their advisory discussions.

One of the concrete objectives that emerged from the coalition agreement was an emissions reduction of no less than 49%. ABN AMRO figures show that a significant portion of CO2 emissions can be attributed to the built environment. In their ‘Vision 2030: Making real estate more sustainable’, homes, business premises, and other buildings jointly account for a share of about forty percent of total CO2 emissions. When combined with the aim of ensuring the Netherlands is energy neutral and fully circular by 2030 and 2050 respectively, it illustrates how making the housing market more sustainable is slowly but surely becoming a priority within Dutch households and financial institutions.

The necessary tax subsidies are available for people who want to make their homes more sustainable, through things like buying a heat pump or having solar panels installed on the roof. A range of mortgage providers offer interest rebates for improving a home’s green energy labels, and many municipalities also offer sustainability loans at favourable rates so homeowners can put energy-saving measures in place. On the other hand, banks are still far from willing to cooperate on sustainability issues for their customers, as evidenced by the Vereniging Eigen Huis report, which shows that a quarter of lenders are not cooperative when it comes to measures promoting better energy consumption.

These are tight deadlines with strict objectives attached, so it’s more important than ever for sustainability to play a central role in financial advice. Just as an advisor must already include scenarios such as long-term disability and death (according to AFM regulations), sustainability must also become a central part of advisory discussions. Players in the financial sector should not only share their views, as they’re already doing, but should also actually translate those opinions into concrete measures – not by taking on the role of energy advisor, but by meeting their sustainable customers’ financing needs. That means not only showing these homeowners what funding sources and tax benefits are available, but also fully integrating the proposed measures into their advisory considerations. For example, what are the consequences for monthly income? And how will someone pay for sustainable measures that cost thousands of euros? Will they dip into their own savings, so the energy savings can immediately generate income via the lower energy bill? Or will they need a loan, which means it will take longer before they’ve recouped their investment?

That is precisely where the consultant can truly add value. Sustainability measures have an impact on someone’s overall financial landscape, which already includes so many different parts (in April, research showed that at least forty percent of people had a poor overview of their finances). By giving them a clear, accurate picture of their financial situation, financial advisors are able to help their clients make informed decisions that have taken every relevant scenario into account.

We’re already headed that direction by including the sustainability of the home within our software as financial calculations and implications.   It’s time to stop talking and start doing.

Want to know more about Omniplan’s Whitepaper and research results? Click here.


Omniplan will be attending IndustryForum Banking in The Netherlands on the 7th and 8th of November 2018