'Get serious': Housing firms call on government to deliver £2.3bn home retrofit programme

Housing firms urge government to ‘get serious’ about energy efficiency and home retrofits in order to address cost of living crisis and drive net zero transition

Major housing firms have demanded the government “get serious” about the cost of living crisis by committing £2.3bn a year to retrofitting millions of draughty homes across the country over the next decade, or risk derailing the net zero transition while “fighting a losing battle” against soaring energy bills.

Research published today by the Building Back Britain Commission – a coalition of firms from across the property industry including Barratt Developments, Legal & General, Mace, Thakeham, NHBC, and Riverside Group – underscores the need for urgent action to address the “enormous challenge” of decarbonising the UK housing stock.

It estimates that in the average English local authority area 58 per cent of homes are below the EPC energy efficiency rating standard of ‘C’ and will therefore need upgrading within the current decade to meet government targets.

The total cost of getting all homes up to this standard is likely to be at least £200bn it warns, but it stresses that “radical action” would help reduce energy bills for some of the nation’s poorest households amid the worsening cost of living crisis , while also cutting carbon emissions.

At present, it is likely to be financially unviable for householder in leaky homes under the ‘critical price threshold’ of £162,000 to upgrade their homes with solar panels, heat pumps or cavity wall insulation as the cost of work would likely exceed the potential house price gain, it said.

Moreover, the research asserts that the problem is particularly acute in so-called ‘levelling up’ areas of the country – many of which are in marginal ‘red wall’ seats – where more than a third of homes are priced below £162,000, compared to 10 per cent in non-levelling up areas.

However, by committing to spending £2.3bn a year over the next decade to raise the energy efficiency standards of 2.3 million of England’s most draughty homes, the government could kickstart a “retrofit revolution” that would save on bills and boost jobs, according to the coalition.

Terrie Alafat, chair at both the Building Back Britain Commission and housing association The Riverside Group, urged the government to “get serious about tackling the cost of living crisis with radical action to improve the energy efficiency of millions of our homes”.

Without a strong funding commitment for retrofitting millions of draughty homes, the government “will always be fighting a battle on both net zero and energy bills”, she warned.

“But by working with industry and following the steps that we suggest, it could yet have a win-win,” Alafat explained. “In the long-term, taking determining action now to make our homes more energy efficient will enable the UK to make much-needed strides forwards on the path towards net zero. In the short-term, it will also mean lower fuel bills for millions of people who are suffering as a result of the energy crisis and urgently need help with the cost of living.”

The Treasury was considering a request for comment at the time of going to press.

However, the intervention comes as the government faces growing pressure to offer greater assistance for vulnerable households facing a sharp rise in the cost of living – particularly through energy bills and food – in the wake of Covid supply shortages and soaring fossil fuel prices exacerbated by Russia’s war in Ukraine.

Earlier this week Labor tabled a motion calling for a windfall tax on oil and gas companies which have reaped in record profits in recent months thanks to rising fossil fuel prices, with the revenues used to assist vulnerable households. While the motion was voted down, government figures’ appear to be reluctantly warming to the measure.

Jason Millet, CEO at consultancy Mace – one of the Building Back Britain Commission members – said the steps set out in the coalition’s report today were “ambitious yet realistic”, and urged the government to commit more funding to decarbonising homes.

“The retrofit imperative is clear, and it is essential that the government commits funding to create greener, safer homes,” he said. “In addition, action should be taken to encourage greater uptake of modern methods of construction that will allow the housebuilding industry to be more self-sustaining in net zero efforts.”


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