Despite the government’s recent decision to financially support homeowners and social landlords willing to conduct energy-efficient retrofits, the current measures simply do not go far enough. Worse still, social landlords who fail to take advantage of the offer at an early stage run the risk of missing out altogether.
The Chancellor recently confirmed the allocation of funding to the tune of more than £3 billion for ‘green job’ creation over the coming years. The vast majority of it was earmarked for private sector initiatives, including a new ‘Green Homes Grant’ worth £2 for every £1 landlords and owner occupiers spend on energy-efficient upgrades.
The funds would be available up to a maximum of £5,000 for most, increasing to £10,000 for low-income households. According to the official government statement, the initiative will benefit a minimum of 600,000 homes in England, potentially “saving households hundreds of pounds per year on their energy bills” as a result.
Though the Chartered Institute of Housing also warned that “social landlords who don’t act now could find themselves struggling to meet a target because they haven’t given it the priority it deserves,”
Right incentive, wrong time?
On one hand, some argue that mathematics works and should therefore be taken advantage of. Where relatively basic home improvements like cavity wall insulation or loft insulation are concerned, a contribution of £2 from the government for every £1 spent seems pretty generous. especially when considering the ongoing benefits of energy efficiency, for example, reduced energy bills.
The problem is that, as it stands, there’s no real certainty whether homeowners or landlords will have the confidence right now to fork out for any kind of major home improvements. As the vast majority of households are still reeling from the financial impact of the COVID-19 crisis, it seems likely that the incentive will expire before most are able to take full advantage of it.
Redistribution of funding
Experts at the Chartered Institute of Housing believe it may be necessary for the allocation of the full £3.8bn Social Housing Decarbonisation Fund to be modified in order for the initiative to have the desired effect. One of the ideas floated by the institute is that of zero-interest loans for the private sector, where major updates and improvements are required.
They also believe that local authorities should have more of a say in how the funds are allocated and spent.
“There’s a case for local authorities and possibly housing associations to lead the way in the private sector—for example, by retrofitting Right to Buy properties on estates or tackling all the homes in fuel-poor neighbourhoods,” suggests the Chartered Institute of Housing.
In the meantime, the Institute also advises landlords to make full use of the initiative at the earliest possible stage, rather than delaying their decisions to act for too long.
“As well as considering whether to bid for money from the pilot scheme, they (landlords) shouldn’t delay in assessing their stock in detail to establish how much retrofit will cost and where the biggest challenges are.”
“Some landlords are already doing this, but those who don’t are taking a risk. Not only might they miss out on funding, but they could find themselves struggling to meet a target because they haven’t given it the priority it deserves.”