Green Homes Grants: What went wrong? What went right?

Introduction

In the late Spring of 2021 the NRLA, working alongside TDS looked at landlord investment decisions in energy efficient measures.  The study also looked specifically at the Green Homes Grant (GHG), a voucher scheme which was intended to support the governments target of making 600,000 homes more energy efficient. The scheme was closed suddenly during the fieldwork phase of this research.  This report focuses on the role the Green Homes Grant (GHG) has played in supporting landlords. It considers whether a role for such a grant exists and if so, how that role can be maximised in terms of take up and impact.

About this paper

This paper seeks to:

1. Understand motivations and behaviours underpinning landlord investment in energy efficiency (EE) measures.
2. Find evidence to suggest whether the scheme has had an impact on investment.
3. Suggest how any successor scheme to GHG could be more successful in progressing the Government’s energy efficiency objectives. 

Wider survey topics

The study focused on landlords whose portfolio of rental properties is based mostly in England. There were 1,212 landlords who answered at least one question in the survey. Topics in the survey included:

• Current energy efficiency ratings of landlords’ portfolios.
• Recent and future planned investments in energy efficiency measures.
• Key motivations for those investments.
• Satisfaction with the impact of work on energy efficiency.
• Awareness, take-up and usage of Green Homes Grants.
• Views of landlords on developing future energy efficiency grant schemes.

Why the scheme failed landlords

From the information collected for this report, very few landlords had taken up the opportunity of using a GHG voucher. Many landlords had only heard of the scheme through completion of our survey. For those that had, the reasons for not taking up the scheme included: 

• Failings in the scheme’s operation (For example, application guidance & process; scheme marketing, need for a TrustMark qualified tradesperson).
• The eligibility criteria being inappropriate (included here is the distinction in defined primary vs secondary measures as well as complex eligibility rules).
• The practicalities landlords faced in taking up vouchers to deliver improvements (For example, having to move tenants out of the property to meet voucher timescales).

BUT - there IS evidence of need

The evidence collected in this paper shows that: 

1. For many landlords investing in energy efficient measures, there is a correlation between landlords more focused on addressing the EPC rating and use/potential use of a GHG voucher.
2. Plus, evidence indicates users of GHG vouchers are finding the vouchers have value – they result in supporting activities which have high additionality: they would not have gone ahead without the existence of the voucher. 
3. Finally, there is little evidence the grant crowds out alternative funding sources from the private sector (for example loan finance).

The conclusion from the evidence is that for those landlords who wished to address EPC levels at their property, the GHG voucher was invaluable in supporting that investment.  The vouchers supporting landlord investment represents value for money for HM Treasury. 

Nick Clay Research Manager

Nick Clay MSc, PgDip is the lead researcher for the NRLA. He previously worked for the RLA where he introduced the Landlord Confidence Index. Nick takes responsibility for the Research Observatory's content and rigorous approach to data analysis. He is a Certified Member of the Market Research Society.

Nick was formerly a Senior Economist for a multi-national consultancy. He has expertise in business support and entrepreneurship. He has written academic research, undertaken evaluations and developed strategies for business support organisations across England & Wales.

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