Energy efficiency improvements in UK homes forecasted to fall short by 13 years due to sluggish upgrades

Losing the Race to a Warm, Energy-Efficient Future

It's looking increasingly doubtful that the UK will manage to meet its goal of having all homes meet minimum energy efficiency standards by 2030, with leading banks predicting delays of up to 13 long years.

New predictions indicate that it might not be until 2043 before most properties hit the government's benchmark for energy performance, EPC Band C.

This delay poses a threat to climate targets and could leave homeowners grappling with higher energy bills, reduced property values, and obstacles in selling or remortgaging.

Financial Institutions Cry Foul

UK Finance, representing the banking and finance sector, has sounded the alarm, suggesting that it might not be until 2043 before the targets are met. They warn that the massive scale of home upgrades, combined with financial and logistical barriers, could result in widespread non-compliance.

"The timescale is challenging and overly ambitious," UK Finance stated in their consultation response.

Similarly, Lloyds Banking Group has expressed concerns about the slow pace in decarbonizing the UK's housing stock. Rebecca Heaton, Director of Environmental Sustainability at Lloyds Banking Group, stated, "As the UK's largest mortgage lender, we are concerned by the inadequate progress in decarbonising the UK's 28 million homes. The UK has the oldest and draughtiest housing stock in Europe, and progress is lagging behind."

Lloyds advocates for abandoning the proposed 2028 deadline for new tenancies and argues that achieving the 2030 deadline for all tenancies will depend on homeowners' understanding of necessary improvements and the availability of financial support.

The Mountain to Climb

Currently, around 60% of the UK's housing stock falls below the EPC C standard. To meet the 2030 target, an estimated 1.6 million properties would need to be upgraded annually, equivalent to retrofitting about 2,000 properties each day—a daunting task. Failing to meet this target could lead to fines of up to £5,000 for homeowners.

This ambitious rate is further complicated by insufficient capacity in the retrofit supply chain and labor force.

Calls for Government Action

Industry experts and financial institutions are urging the government to supply clearer guidance and increased funding to help homeowners make energy efficiency improvements. Which, the consumer advisory group, previously called for a review of EPC rating systems after it was found that "too many EPCs do not provide an accurate assessment of a home's energy efficiency."

Financial incentives, such as grants, low-interest loans, or tax breaks, have also been suggested to make upgrades more accessible. A group consisting of Mortgage Advice Bureau, TSB, Leeds Building Society, and Coventry Building Society has proposed a stamp duty refund for homebuyers who retrofit their property to achieve an EPC rating of C or higher. They believe that such incentives would make energy-inefficient homes more attractive to buyers, stirring a wave of upgrading across the UK housing stock.

Editors Notes:

The UK government is implementing multiple actions and financial incentives to help homeowners and landlords upgrade properties to meet new energy efficiency standards. Key challenges include the vast scale of retrofitting required, financial burdens, and limitations in current EPC calculations. To combat these challenges, various programs, such as the Boiler Upgrade Scheme, the Great British Insulation Scheme, and the Warm Homes Plan, offer funding and support for energy efficiency upgrades. The government also implements planning reforms and industry standards to make heat pump installation easier and promote quality retrofitting projects. Financial incentives, such as grants, low-interest loans, or tax breaks, are proposed to make upgrades more accessible, and stakeholder groups call for clearer guidance and increased funding to support homeowners. For more information, visit Homebuilding & Renovating for expert advice, how-to guides, and design inspiration.

The delay in meeting the energy efficiency standards for homes in the UK poses a threat to climate targets and could leave homeowners facing higher energy bills and reduced property values.
UK Finance, representing the banking and finance sector, has sounded the alarm, expressing concern over the overly ambitious timeline for meeting the energy efficiency goals, suggesting that it might not be until 2043 before the targets are met.
Lloyds Banking Group advocates for abandoning the proposed 2028 deadline for new tenancies and argues that achieving the 2030 deadline for all tenancies will depend on homeowners' understanding of necessary improvements and the availability of financial support.
To meet the 2030 target, an estimated 1.6 million properties would need to be upgraded annually, which is further complicated by insufficient capacity in the retrofit supply chain and labor force.
Financial institutions urge the government to supply clearer guidance and increased funding to help homeowners make energy efficiency improvements, as inadequate progress in decarbonizing the UK's housing stock remains a concern.
Proposed financial incentives, such as grants, low-interest loans, or tax breaks, aim to make upgrades more accessible, with some suggesting a stamp duty refund for homebuyers who retrofit their property to achieve an EPC rating of C or higher.
The UK government is implementing multiple actions and financial incentives to help homeowners and landlords upgrade properties to meet new energy efficiency standards, such as the Boiler Upgrade Scheme, the Great British Insulation Scheme, and the Warm Homes Plan.
The government also implements planning reforms and industry standards to make heat pump installation easier and promote quality retrofitting projects in the battle against climate-change, as energy-efficient homes and businesses contribute to a more sustainable future.