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Mr Johnson, act now on housing or your green legacy is at risk – Whittaker

by: David Whittaker, CEO of Keystone Property Finance
  • 28/06/2021
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Mr Johnson, act now on housing or your green legacy is at risk – Whittaker
All Prime Ministers, no matter who they are, have one eye on their legacy.


Tony Blair, for example, wanted to be remembered for bringing peace to Northern Ireland, whereas David Cameron wished to be known as the reformer who introduced same-sex marriage.  

Boris Johnson clearly wants to seen as the ‘Green PM’ who set the UK on the path to a carbon-free future. As legacies go, it’s certainly a noble one to aspire to and, to his credit, Mr Johnson has pledged to slash emissions by 78 per cent of 1990 levels by 2035.  

On the surface, this sounds wonderful – of course it does.  

However, I cannot help but feel the government is doomed to miss this target and has undermined the drive to net-zero with somewhat contradictory policymaking. 

I am talking here, of course, about the government’s decision to scrap the promising Green Homes Grant (GHG) after just six months. Housing accounts for roughly 14 per cent of total UK emissions, therefore it is absolutely vital we have a plan in place to reduce its impact on the environment.  

So why decide to scrap the GHG before it had had a chance to truly make a difference? 


The workings of the scheme

To recap, the GHG allowed homeowners and landlords to apply for vouchers worth up to £5,000 (or £10,000 for those on benefits) to recover 65 per cent of the cost of making their homes more energy efficient.  

While the scheme was far from perfect, it could have been a highly effective green policy stimulus if given the chance. I suspect homeowners and landlords were quicker off the mark, despite barriers put in their way, in applying for the grants and alarm bells began to ring over at the Treasury. 

What I am also having trouble understanding is why the government pulled the GHG scheme at the same time that it is considering legislation to force landlords – and homeowners, to an extent – to make their homes greener. 

Landlords may be forced to ensure their properties have an EPC rating of at least a C by April 2025 for new tenancies and April 2028 for longer-term tenants. 


Costs to landlords and homeowners

Politicians often mistakenly assume that landlords have an endless pot of cash that can be milked whenever needed. But this is far from the truth and in this instance, landlords were only able to recoup 65 per cent of funds they had already expended. 

We are still recovering from the biggest economic shock in more than 300 years and the reality is many people are currently walking a financial tightrope – landlords included. 

Predictions on the true cost of lifting an EPC E rated property to the new minimum of EPC C are imprecise as they vary from property to property and region to region, but the average seems to be £4,700. 

Therefore, is it really fair to ask these people to conjure up thousands of pounds for home improvements without offering some form of government support?  

Absolutely not, and my worry is that failing to replace the GHG will result in a new cohort of mortgage prisoners, those denied the opportunity to move or remortgage because they can’t afford to make their homes greener. 

What, then, should be done? 


Tax breaks and rebates

By pulling the GHG, the government seems to have ruled out direct financial support. A perhaps less effective but cheaper approach, for now, would be to use the tax system. Whether it be slashing VAT rates on home improvement work, as is applicable on redevelopment, or retrospective tax rebates for those who improve their property’s EPC score.

Neither of these measures are ideal replacements, but something is better than nothing. 

Boris Johnson wants to be remembered as the ‘Green PM’. But if he doesn’t come up with a replacement for the GHG soon, that legacy is seriously at risk. 

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