From Robert Ulph on November 15, 2021
With COP26 well underway climate change is dominating many headlines and thinking, and as an estimated 14% of the UK’s carbon emissions come from the way we heat our homes, energy efficiency in property is high on the agenda.
However, a recent report – Lagging Behind, Energy efficiency in low-viability properties – raises issues with the very plans to decarbonise our housing to meet net zero targets, stating that private rented sector (PRS) homes especially could be left lagging behind. It is well documented that with a higher proportion of older stock than other housing tenures, the PRS has some of the biggest challenges in meeting the Government’s energy efficiency and decarbonisation ambitions.
The report also highlights significant regional differences, as well as tenure, based on the estimated costs of the improvements versus the variation in property value across the country. Propertymark has worked alongside key stakeholders to urge the Government to give serious consideration to the impact of regional variability in house prices and dwelling stock when installing heat pumps to hit decarbonisation targets. Failure to factor in huge regional variations in property prices when incentivising homeowners and landlords to retrofit their properties to targets could risk seeing a reduction in the quality and availability of housing stock.
According to the report, in areas where homes are of lower value with the estimated cost of retrofitting heat pumps between £8,000-£14,000 this can be around 25% of the property value. PRS landlords are unlikely to have either the rental income or equity to finance upgrades, especially when the improvements don’t add the same value to the property. According to the Energy and Utilities Alliance, 54% of people can’t afford the full costs and 26% say they would pay it only with financial support. So, what support could be available?
The Heat and Buildings Strategy launched with the £450 million Boiler Upgrade Scheme, which will grant homeowners £5,000 to replace their gas boiler with a heat pump. So, there is a call on the Government to also set out clearer incentives, funding mechanisms and long-term clarity on timelines to ensure retrofitting can be achieved in the PRS, especially with low-viability housing.
Recommendations to local government in the report also include developing ‘one-stop shops’ to engage with landlords to find suitable methods to facilitate retrofit at pace. These one-stop shops would allow local authorities to better understand the personal circumstances of landlords in the area and better tailor engagement and awareness-raising on retrofitting in this tenure.
In order to meet the net zero targets, there must be extra help given to owners of lower value properties to make it viable for them to invest in energy efficiency measures and I will keep you up to date with what happens.
In the meantime, if you have questions on this or require any advice on the local property market, please do not hesitate to contact me as I am always happy to help.