UK Finance has published a report, Unlocking Demand for Green Home Finance, calling for a comprehensive national strategy to increase the uptake of energy-efficient home improvements.
The report highlighted the urgent need to boost consumer adoption of technologies such as insulation, heat pumps, and solar panels, which currently remains too low to meet the UK’s carbon reduction targets.
Central to the report was research conducted by YouGov, which explored public attitudes towards heat pump technology.
The findings revealws significant barriers to adoption. More than half of those surveyed – 54% – said the high up-front cost is the primary reason they have not considered installing a heat pump.
Additionally, 44% indicated they would be more likely to switch if they had a clearer understanding of the potential savings on running costs.
The report stressed that increasing demand for green home upgrades will require more than just access to financing.
It argued that behavioural change must be supported by clear, sustained Government action.
This includes public information campaigns to counter misinformation, advisory services to help homeowners navigate retrofit options, and a stable policy environment that encourages investment by both households and businesses.
As part of its recommendations, UK Finance set out nine key actions that it believes should be embedded in the Government’s upcoming Warm Homes Plan.
These include the creation of a Government-led body to coordinate efforts across stakeholders, measures to give firms greater policy certainty, and the launch of a national awareness campaign backed by independent guidance.
The report also called for financial support in the form of grants and subsidies, a coordinated national plan to train sufficient numbers of skilled tradespeople, and a rebalancing of energy prices through adjustments to existing levies and targeted support.
Furthermore, it recommended deploying Government funds to enable lower-cost lending for green home improvements, expanding existing grant programmes, providing clear long-term policy signals to help households and industry prepare, and updating energy efficiency metrics to ensure accurate and consistent assessments of property performance.
UK Finance warned that without a concerted, well-resourced strategy, the UK risks falling short of its environmental goals.
Ian Bhullar, director of sustainability policy at UK Finance, said: “To meet our ambitious targets on greening the UK’s housing stock we need to drive demand and convince the public of the benefits.
“Lenders are committed to playing their part and through the government’s Warm Homes Plan we have the opportunity to really make a difference.
“Increasing demand for green home improvements will bring significant benefits, stimulate job creation, drive innovation, and reinforce the UK’s energy security in an increasingly volatile global market.”
