Industry News Rhianna Abrey 21/10/2021

"One size fits all" approach to retrofitting nation's homes risks widening economic inequality, warns new research

Today marks the launch of a new report, authored by leading think tank Localis and sponsored by the NRLA, entitled ‘Lagging Behind: energy efficiency in low-viability properties’.

This research calls on the government to consider the impact of regional variability in house prices when installing heat pumps to hit decarbonisation targets.

According to the report’s findings, in some local authority areas of the north and midlands, the estimated costs of improving home energy are around 25% of property values. By contrast, in affluent parts of London and the south east the cost of retrofitting with heat pumps represents less than 2% of overall property value.

To take one example, in the red wall constituency of Burnley, where nearly four-in-five dwellings need to attain EPC Grade C standards, standard retrofitting costs of £24,000 are equivalent to a quarter of median house prices of £99,500.  However, in the Royal London Borough of Kensington and Chelsea, where median house prices are £1,317,500, retrofitting costs are equivalent to a mere 1.8% of overall property values.

This report calls on councils, especially in ‘red wall’ areas where property values are low, to collaborate in creating ‘one stop shops’ as joint ventures which would engage with residential landlords to retrofit at pace and make use of aggregated scale to devise bespoke solutions that meet local need and personal circumstances.

Other recommendations include calls for:

  • local authorities to come up with local retrofit jobs strategies to make use of skills and supply chain opportunities;
  • central government to provide clear and concise information and timelines as well as more readily understood incentives;
  • The Department for Business, Energy and Industrial Strategy to frontload the £3.8bn Social Housing Decarbonations Fund Demonstrator to deliver cost savings through acting at scale.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “With a higher proportion of older stock than other housing tenures, the private rented sector has some of the biggest challenges in meeting the Government’s energy efficiency and decarbonisation ambitions. We therefore welcome news that landlords can access grants to transition to low carbon heating.

“We support the recommendation in this report that extra help should be given to owners of low value properties to make it viable for them to invest in energy efficiency measures and urge the Government to act accordingly.”

Localis Chief Executive, Jonathan Werran, said: “Without a tailored and localised approach that considers the varying housing economics of each locality, a ‘one size fits all’ approach to funding retrofitting threatens to deepen regional inequality and counter efforts to level up in red wall areas.

“If the challenge of how to effectively support retrofit properties in low value areas is not met, we risk creating a dangerous divide between different parts of the country.”

Propertymark Policy and Campaigns Manager, Timothy Douglas, said: “A ‘one-sized fits all’ approach rarely works in any policy implementation but when dealing with affordability and property this is particularly true.

“To avoid regional inequality the research recommends a greater degree of strategic planning by local authorities to develop frameworks to help with affordability and spark local economic growth through collaborative working, developing skills, creating green jobs and utilising existing supply chains.”

NRLA webinar: Preparing the Private Rented Sector for the Future

Join us for a webinar on Thursday 18th November at 1pm, for a discussion on the transition to net zero and what this means for the private rented sector.

As the COP26 Summit comes to a close, significant proposals have been made by government to ensure that the UK housing stock is ready to transition to zero carbon. This transition will dominate the housing sector for the next two decades and has particular ramifications for the private rented sector.

Join us for a discussion on the transition to net zero and what this means for the private rented sector.  

10 min presentation from each speaker followed by Q&A.

• Gavin Dick - Local Policy Officer, NRLA
• Timothy Douglass - Policy and Campaigns Manager, Property Mark  
•  Jonathan Werran - Chief Executive, Localis

Register for free here.