Mortgage and Property Investment Magazine Logo

New research outlines urgent action required to speed up energy efficient retrofitting of UK homes

by | Dec 5, 2022

Share this article

GreenSpur Renewables

The government should do more to implement policies that will support the financing and roll out of energy efficiency retrofits in UK homes in order to reduce energy bills, support green jobs and deliver on the UK’s net zero targets, according to a new report commissioned by industry-led group Bankers for Net Zero (B4NZ). 

The report, developed with WPI Economics and sponsored by HSBC UK comes days after the government announced its ECO+ scheme, offering grants to households in council tax bands A to D for loft and cavity wall insulation.

The report acknowledges that the ECO+ scheme is a step in the right direction, but found that a more comprehensive package on retrofits could be developed for a greater number of households, with government working closely with banks, local authorities, and tradespeople.


Through delivering a new policy framework, some households could see their energy bills fall by £555 a year and an additional 350,000 jobs could be created in the green economy.12

In the report, researchers found that the UK must urgently address emissions from its building stock to meet its climate targets. Residential buildings have seen limited progress in emissions reductions in recent years, which is in contrast to the significant progress made on the decarbonisation of power.

This, however, can be addressed though policies that drive greater public-private collaboration and unlock private finance that support household retrofitting, the report found.


The Retrofit Conundrum report from B4NZ calls for greater action on three key areas:

  • Financing: Banks have a pivotal role to play in the retrofit process, providing finance to address the high upfront capital costs of retrofits, through mortgages and other loans related to property. However, significant barriers and policy gaps remain in terms of enabling a business model that supports financing this across the UK’s building stock. New policies are required to overcome this, such as enabling property linked finance (to address situations where the payback period is currently longer than likely tenancy) and a stamp duty-based incentive (e.g. the government offering stamp duty discounts to households that will use the money saved on insulating their homes). Due to the affordability challenges and long payback timescales, the public and private sector need to come together to provide financial assistance and incentives, potentially targeted at low-income households at an early stage
  • Governance: Work must be done to ensure local and regional governments have the tools and funding needed to support the green transition. Regional and local government have significant advantages in terms of local networks and convening power, ability to tailor solutions to local characteristics, and scale to coordinate interconnected aspects of the green transition (e.g. grid investment and electrification of heat) and this needs to be supported.
  • Consumer awareness: Households should be empowered to take the necessary steps to retrofit their homes. There is currently low awareness about energy efficiency measures and low carbon heating, with recent YouGov research finding 35% of UK consumers have not heard of an EPC rating, and almost half (48%) of UK consumers are unsure of the lowest EPC rating of a home they would consider buying.There is also little understanding around the steps required to retrofit their homes or access to trusted and relevant local suppliers. Banks can play a role as potential advisers in this space. Industry, government and education providers will also need to work together to develop the relevant skillsets to deliver retrofitting at scale and pace.

Implementing these measures would realise significant benefits beyond delivering on UK net zero goals. These include a potential saving of £555 a year in household energy bills, and significantly better health outcomes through reducing fuel poverty and cold living conditions, which could prevent up to 10,000 excess winter deaths. The retrofit programme would represent significant levels of investment, providing an additional 350,000 green jobs in the construction sector across all parts of the UK, supporting the government’s levelling up agenda.13

The report highlights key examples of successful trials and local case studies which are exploring innovative methods of scaling up energy efficiency measures in households. This includes Greater Manchester’s property linked finance trial, West Midlands Combined Authority’s Net Zero Neighbourhoods programme, Cosy Homes Oxfordshire retrofit service and Bristol City Council’s LEAP Initiative. Learnings from several of these trials have supported the key recommendations of this report.

The report comes as the issue of energy efficiency has risen rapidly on the UK government’s agenda. Last week, the government announced the ECO+ scheme, offering grants to households. At last month’s Autumn Statement, the government committed to address energy efficiency with new funding and a new taskforce. Bankers for Net Zero welcome the creation of this taskforce and recommends that it focuses on four key areas of policy, the role of finance, consumer education and building a trusted supply chain.

Heather Buchanan, Co-Founder and Director, Bankers for Net Zero said: “UK’s building stock must be urgently addressed if the UK is to meet its net zero climate targets in the coming decades. The banking sector and government must ensure there is strategic policy alignment to deliver our shared climate objectives. This report sets out how policy can unblock the recent stasis in emissions reductions in the UK building stock, so that the full potential of banks to support decarbonisation can be realised.”

Ian Stuart, Chief Executive, HSBC UK said: “Banks can play a critical role in the supply of finance and educating our customers on the benefits of energy efficient homes, however public-private collaboration is needed if we are to successfully address the scale of the challenge. 

“A holistic approach, tied to key moments like home improvements and moving house is key. Beyond financial incentives, there is a need for skilled expertise as well as consumer education and advice about the right choices, guarantees of good works, and improvements to EPC ratings. In addition to helping the UK meet its climate targets, lower bills, better health and green jobs are all co-benefits of improving the energy efficiency of the UK’s housing stock.”

Bim Afolami MP, Bankers for Net Zero Champion said: “I am very pleased to welcome Bankers for Net Zero’s retrofit conundrum report. The importance of addressing UK’s building stock emissions as part of the transition to Net Zero cannot be understated. This past year we have seen significant energy prices rises, as a result of Putin’s war in Ukraine, which has meant action on installing energy efficient retrofitting of UK homes is more urgent than ever, to help reach our net zero targets and keep energy bills down. Government, banks, housebuilders and local authorities must all work closely together to unlock private finance and empower households to deliver the necessary energy efficiency measures across the UK.”

Share this article

Related articles

Sign up to the Mortgage and Property Newsletter

Trending articles

IFA Talk logo

IFA Talk Mortage and Property is the new addition to the IFA Talk podcast family, where we discuss the latest topics relevant to Mortgage and Property professionals.

IFA Talk Mortgage & Property Podcast