A UK lender has set aside £100M to finance projects where owners reduce the carbon emissions of their properties.

Unity Trust Bank, which has a remit to lend to sustainable and socially impactful projects and borrowers, said it is looking to fund property owners working toward a low-carbon future.

Data on green lending is difficult to come by, but the UK green lending sector stood at around £50B at the end of 2024, according to consultancy AFME, and was predicted to grow by 20% a year between now and 2035.

Green lending has increased in the real estate world but has been more common among larger borrowers thus far.

Unity Trust said its green fund is available for commercial or residential assets and will provide improved lending terms to owners looking to reduce the environmental footprint of their buildings.

The debt is available for projects such as low-carbon heating, improved insulation, small-scale renewable energy and climate resilience measures.

“As a social impact bank, we believe that finance has an important role to play in achieving a greener future,” Unity Trust Head of Impact Propositions Matt Conroy said.

“The terms are designed to be clear, easily understood and to provide fair value to customers through transparent pricing and tangible cost benefits.”

Unity’s green lending program replaces its Retrofit Transition Initiative, which launched in 2023. To date, more than 1,770 affordable homes have benefited from RTI funding.