Lloyds Banking Group has released the Housing Stocktake 2023 report, sharing insights on the efforts to decarbonise the UK’s housing stock.
The 28m residential properties in the UK account for 16% of the UK’s total carbon emissions but the report from Lloyds reveals that while nearly six in ten (57%) homeowners think it’s important to make their property ‘net zero ready’ by 2035, over two-thirds (69%) have not taken any action to make improvements in the last five years.
The Housing Stocktake 2023 report reveals that cost is the biggest barrier for change for homeowners with just one in five (20%) homeowners able to pay for the steps needed to ensure their home is ‘net zero ready’ by 2035.
The findings highlight that nearly half (49%) are put off by prohibitive high initial costs and believe that there is a lack of financial support available. Other barriers for change include not knowing where to start (27%) or the inconvenience and hassle of building work (22%).
Homeowners who have been able to invest in their property are already seeing the benefits, with nearly all (96%) who have made changes pleased with the results.
Three quarters (73%) of homeowners who have undertaken retrofit work said their installation had performed at least as well as expected, with half (50%) stating the upgrades have performed even better than expected.
Over eight in ten (81%) would recommend retrofit works to friends or family, claiming the main benefits are their homes are now warmer (77%) and cheaper to run (64%).
Despite these findings, one in four UK homeowners never expect to move away from oil or gas fired heating in their lifetime, and nearly half (46%) do not know the EPC rating of their property.
Rebecca Heaton, Director of Environmental Sustainability at Lloyds Banking Group, said:
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 off track. The lack of progress in decarbonising our homes risks pushing critical net zero goals – and keeping global warming within the 1.5⁰C threshold – further out of reach.
“Our report shows that UK homeowners are clearly experiencing benefits of retrofitting, like warmer homes and cheaper running costs, but they’re in urgent need of more support. We are committed to finding a solution by working closely with the government, housebuilders and developers to provide UK households with more certainty and better tools and incentives to unlock the scale of retrofit at the pace we need.
Architect and television presenter George Clarke, who has contributed to the Housing Stocktake 2023 report, said:
UK homeowners are increasingly eager to upgrade their property’s heating and insulation. Despite this demand, today’s data shows just how many feel ill-equipped to do so – whether through a lack of financial means, or access to key information. If COP28 can see the UK Government work together with banks and lenders on developing better support for households, there’s a chance this could unleash a wave of retrofit activity taking place in the UK, making our homes better for the environment – and warmer and cheaper to run in the long term.
Decarbonising homes is a core focus for Lloyd Banking Group and it is advocating for five key policy measures that can drive forward the supply of decarbonised housing in the UK:
Long-term policy certainty on sustainable homes: The Government should establish a stable and long-term framework that provides certainty for energy efficiency and low carbon heating systems, ensuring that efforts toward retrofitting improvements are not derailed by short-term policy fluctuations.
Improvement of Energy Performance Certificates (EPCs): It is imperative to enhance the accuracy and timeliness of EPCs. Consumers need confidence that changes made to their homes for better energy efficiency will be accurately reflected in their EPC ratings, thereby leading to tangible reductions in energy consumption.
Energy-efficiency linked stamp duty: Introducing a system of stamp duty that rewards lower-carbon improvements can significantly motivate homeowners to invest in energy-efficient enhancements. This adjustment in the stamp duty regime can serve as a powerful incentive for prospective buyers to prioritize properties with environmentally features.
Use of employer tax incentives to encourage improvements: Removing existing tax barriers for employers and enabling schemes such as salary sacrifice or benefit in kind initiatives can encourage employees to retrofit their homes. This measure can serve as a crucial step in fostering a culture of sustainability within the workforce and the wider community.
Addressing the retrofit skills gap: Recognising the potential for job creation within the low-carbon technology sector, it is vital to prioritise the development of high-skilled jobs that cater to the demands of sustainable housing. Increasing the annual transfer cap in the Apprenticeship Levy can facilitate the necessary reskilling and retraining required to bridge the existing skills gap and support the widespread adoption of low-carbon technologies.
