The UK has the oldest and most energy-inefficient housing stock in Europe. Meanwhile, 22% of the UK’s greenhouse gas emissions come from our housing. Recognising the scale of the problem, successive governments have introduced policies and regulations to try to tackle this – but we’re still a long way off, and the capital currently flowing into decarbonising homes is not flowing fast enough.
Decarbonising the sector is critical if we are to meet our net zero targets, but UKSIF’s 2024 polling of large businesses in the real estate sector found that the UK is slipping behind international peers in the race to attract sustainable investment. Unlocking private investment in the UK is essential to close the green finance gap.
We face the daunting challenge of achieving net zero emissions by 2050, while simultaneously keeping energy bills affordable for households. By prioritising energy efficiency, we can unlock a future with a cleaner environment, lower energy costs, and a thriving green economy.
The recent government decision to abandon the target of a minimum EPC rating of C for all private rented homes by 2028 was a significant setback. Citizens Advice estimates that 13 million out of the 15 million UK homes currently below an EPC rating of C have significant potential to reach this standard with retrofitting and upgrades. The benefits are clear: a property moving from EPC-E to C could save tenants a staggering £1,000 per year on energy bills.
The high upfront costs of installing energy-efficient technologies, particularly heat pumps, remain a major hurdle for landlords. However, the long-term cost savings and environmental benefits are undeniable. Supporting private capital investment in energy efficiency is crucial, alongside measures to drive down the cost of these technologies. There’s also a significant opportunity to promote investment in heat pump production, a vital component of a net zero future.
But lack of investment alone doesn’t fully capture the scope of the challenge. There’s a pressing need to address the UK’s skills gap in heat pump installation and repair. France, with its tenfold higher rate of heat pump installations compared to the UK, offers valuable lessons. Their success is partly attributed to a readily available workforce trained in this technology. The UK government’s Green Jobs Taskforce, launched in 2021, aims to create 250,000 jobs by 2030.
A renewed focus is clearly needed, specifically on training heat pump installers, to cut delays and deliver a just transition where creating skilled jobs goes hand in hand with cutting emissions. Expanding the existing network of bricklaying training hubs, a successful collaboration between the National House Building Council and private developers, could provide an effective model for such programs.
Widespread adoption of energy-efficient technologies like heat pumps can significantly lower carbon emissions and could deliver household energy bill savings of as much as £8bn over the next decade. By taking decisive action now, the UK can ensure warm and affordable homes for all while driving the UK towards a cleaner and more sustainable future.
