In the Autumn Statement, Chancellor Jeremy Hunt set a “new national ambition” to cut UK’s energy consumption from buildings and industry by 15 per cent by 2030. This is a cut from 2021 levels.
He said that this would lead to a £28bn saving on national energy bill and £450 off the average household bill.
Hunt said that this “must be a shared mission with families and business playing their part” but the government had responsibility.
As part of this, Hunt said that there would be an additional £6bn in funding made available from 2025 to 2028, in addition to £6.6bn that has already been provided.
Task force on the way
To meet these goals, the government will launch an Energy Efficiency Task Force, who will be responsible for delivering these energy efficiency goals across the economy.
Hunt added that further details on “energy independence plans” would be published by the Energy Secretary Grant Shapps.
Energy efficiency is an increasingly important issue for the mortgage sector with upcoming legislation potentially mandating that new tenancies need to have an Energy Performance Certificate of C or higher by 2025 and all existing tenancies by 2027. This is not yet law.
The UK’s net zero target by 2050 also puts pressure on the housing market, as with 27 million properties in the UK may need retrofitting by that time.
Promise of additional funding is ‘welcome’
Lucian Cook, head of Savills residential research, said that the promise of additional funding for improving energy efficiency of homes was “welcome”, especially now when rising energy costs are at the forefront of people’s minds.
He said that this was leading many households to consider upgrades, primarily through improved insulation and solar.
Cook continued that to improve uptake of such schemes then the “government will need to pull a whole series of policy levers to make a meaningful difference to emissions from our homes, which accounted 20 per cent of carbon dioxide emissions in 2020”.
“Progress in that area appears to have stalled in the past seven years and important consultations – on regulation in the private rented sector and setting mortgage lenders targets for the EPC profile of their loan book – have been kicked into the long grass on the face of it.”
Govt need to make it easy for homeowners
Brian Murphy, head of lending at Mortgage Advice Bureau said that it was heartening to see further funding to help improve the UK’s housing stock, especially as the Net Zero target comes closer.
He continued: “The responsibility of solving energy efficiency in our homes is yet to be fully claimed, and while it may be a joint effort between homeowners, lenders, councils and the government, it’s good to see some solid investment promised – better insulated homes also mean lower bills and will go some way to solving the cost of living crisis.
“What will be interesting to note is how easy the government makes it for homeowners to apply for government support to improve the efficiency of their homes – previous green home initiatives have seen poor take-up or been abandoned completely.”
