You're home and dry with a green lender

Floods have alerted home owners to the importance of a safe location. Specialist providers can help

Worrying talk of global warming, which could create a recurrence of the flooding we have seen in recent weeks, is bad news for those still mopping up their homes. It also underlines the importance of thinking very carefully about the location of any property you intend to buy.

Worrying talk of global warming, which could create a recurrence of the flooding we have seen in recent weeks, is bad news for those still mopping up their homes. It also underlines the importance of thinking very carefully about the location of any property you intend to buy.

The Association of British Insurers is advising house buyers to ask surveyors to include questions about flood risk before exchanging contracts. The Ethical Mortgage Service, which was launched last week, has been set up to do exactly this. A joint venture between the Ethical Investment Co-operative (EIC), a firm of ethical independent financial advisers, and Thirdwave, a company specialising in sustainability, it is backed by the Scottish, Skipton and Yorkshire building societies. The service will offer ethical lending and a sustainability report to borrowers, along with a checklist to improve environmental awareness when buying a house.

Given the recent wet weather, the features home-buyers might now be wary of include, for instance, construction on a flood plain. It is also worth noting which direction the house faces, since that can affect the heating costs. And besides judging overall air quality, buyers might want to think about what improvements could be made - such as better insulation and water-reducing showers rather than a power shower.

As well as improving the surroundings for your family, the local community and environment as a whole should benefit if charges are widespread.

These days, more of us do seem to be more aware of environmental and social issues, and are ready to do something about them. Although ethical investment has been around for years, the concept of green mortgages is a fairly new one.

"This is a product whose time has come," says Roger Talbot, managing director of Thirdwave. "Ethical investment is the fastest growing area in the financial market and the EIC saw a gap in the market for house-buyers who have ethical concerns."

There are already a few ethical mortgages on the market. The Norwich & Peterborough Building Society (N&P), for example, has a carbon-neutral mortgage which will offset the amount of carbon dioxide emissions produced by homes. For every new mortgage or remortgage, Future Forests, an environmental group that N&P has teamed up with, will plant 80 trees over five years.

The Ethical Mortgage Service operates slightly differently with borrowers able to choose any mortgage from the full product range of the three associated building societies. "We didn't want to restrict it to one product," says Philip Cooke, senior consultant at the EIC. "Because there are so many mortgage products available we wanted to give people as wide a range as possible."

These mortgages are not particularly ethical. However, the lenders claim that the fact they are committed to mutuality and that a sustainability report is included in the survey at no extra cost to the customer, means they are thical in nature. Borrowers can opt for ethical repayment plans to repay their mortgage if they want to help the environment further.

"I don't think there is a huge awareness in this area, which is why we are keen to support it," says David Holmes at the Yorkshire Building Society. "Demand is small at the moment but it is a growth industry. I am not saying that we are going to have 50 per cent of our business through this [Ethical Mortgage Service] in the next 12 months, but I'd like to think that in the next decade if we were doing 10 per cent of our business through this service, it would be a job well done."

One of the areas the Ethical Mortgage Service wants to target is "new build". New houses, it advises, should be positioned to maximise light and heat, and well away from danger areas like flood plains. The Scottish Building Society believes that if the service has an impact on the self-build market, it will lead big builders into the service, too.

The positioning of new housing estates is also of great concern from an environmental perspective. After last week's floods, plans for tens of thousands of new houses, particularly in the south-east and East Anglia, may have to be redrawn because of poor flood defences. The government be- lieves such planning is crucial.

Many of the problems might have been avoided if there had been adequate planning. Much of the onus for sustainability should rest with the building companies who need to take responsibility and put new houses in the most suitable locations - rather than simply fill up every bit of spare space.

Another way to do your own research is to visit the new websiteww.undermystreet. com, which provides environmental information about property locations.