With scientists warning the world is now likely to pass the all-important 1.5C global warming threshold before 2027, the need to decarbonise the UK’s housing stock grows stronger every day.
In the same week the World Meteorological Organization (WMO) made the above hugely troubling prediction, we also had the news Nationwide Building Society is to offer its borrowers up to £15,000 interest-free loans to carry out energy-efficiency upgrades to their homes.
While welcome news and undoubtedly a step in the right direction it will be interesting to see if it is enough to entice homeowners into carrying out ‘Green’ improvements.
For any Nationwide borrower already considering installing energy-efficient measures such as solar panels or cavity wall insulation, the offer of a £15,000 interest-free loan for up to five years to cover the cost seems like a win-win. Yet in the middle of a cost-of-living crisis, the market will be eagerly watching to see how popular the product proves to be.
If NatWest’s recent Greener Homes Attitude Tracker is anything to go by, it would seem – worryingly – the desire from homeowners to upgrade their properties may actually be moving backwards, not forwards.
Its latest tracker shows there was a small decline in Q1 of 2023 in the number of homeowners planning to make energy-efficiency improvements to their property both in the next 12 months and over the next ten years. Only 21% of homeowners plan to make improvements in the next 12 months, down from 22% in Q4 2022 and the lowest reading since Q4 2021.
While 63% planned to make improvements over the next ten years, this fell from 66% in the three months to December and down further from a peak of 68% in Q3 2022. The cost of the work was cited by 71% of homeowners as the main reason for them not planning any upgrades during the next decade.
An electric car charging point was the green feature most likely to be installed in the next 10 years, followed by both solar panels and triple-glazing. However, only 39% of prospective homebuyers felt a property’s Energy Performance Certificate (EPC) was a ‘very important’ factor to consider, down from 41% in Q4 2022.
Intriguingly, Nationwide’s latest product makes no mention of the property’s EPC – perhaps due to some of the uncertainties still surrounding the current format and its future importance in law.
While the market waits for reform, homeowners are still in the position where installing expensive features such as air source heat pumps do not necessarily improve their property’s EPC. Anecdotal evidence suggests that instead of spending the money upgrading their current property, some are choosing to move instead.
As one Newcastle-based surveyor commented in the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey: “More people are buying smaller homes due to affordability and we are seeing an increase in people moving out of older homes to buy more energy-efficient new homes.”
While it is not necessarily a bad thing that energy-efficient homes are gaining popularity – it will not be enough to make any meaningful difference to the overriding goal of decarbonising the UK’s entire housing stock
As we prepare our own surveyors to carry out retrofit assessments, homeowners also need to be aware that in some instances there may be cost-effective yet efficient ways to improve their home’s energy efficiency on a budget, such as insulation and upgrading lighting.
A clear link between energy savings and improving the efficiency of one’s home needs to be made for homeowners to invest in the upgrades; while such information is out there, it is only slowly filtering through.
The Government’s recent announcement that 26 firms will receive a share of £4.1m to develop green finance products – such as mortgages – is encouraging, yet even incentives such as 0% loans may not be enough to encourage some cash-stricken homeowners to carry out the retrofits.
In a cost-of-living crisis, the cost of retrofitting is still and will continue to be the most crucial element holding the market back.
Simon Jackson is managing director of SDL Surveying
