Retrofitting in Social Housing Properties

The UK Government has committed to upgrading as many homes as possible to a rating of C by 2035 and reaching net zero in carbon emissions by 2050. Many Registered Providers (RPs) are currently working towards ensuring their properties meet the upcoming Energy Performance Certificate (EPC) requirements by retrofitting existing social homes to make them more energy efficient. To illustrate the importance of retrofitting, research has shown that heat from homes currently accounts for around 16% of the UK’s total carbon emissions and 35% of the UK’s total energy usage;  in fact homes in England produce more carbon than all of the country’s cars.

The Government initially pledged £3.8 billion through its Social Housing Decarbonisation Fund (SHDF) to assist RPs with retrofitting their properties and added an additional £1.25 billion to the fund in December 2023. However, reports estimate that at least another £36 billion in investment is needed, in addition to the £70 billion that the sector is already planning to invest by 2050, to tackle decarbonisation and retrofitting.

Onward Homes took advantage of £551,000 made available to them by the SHDF and partnered with a contractor specialising in net-zero solutions to retrofit 47 homes with new windows and doors, loft and wall insulation, and positive input ventilation, to make the homes warmer, quieter and more comfortable, improving the energy efficiency of properties with an EPC rating below C.

Banks such as Lloyds PLC now offer Environmental, Social and Governance (ESG) finance options for many registered providers, including sustainability-linked loans containing financial and social targets which reduce the amount of interest payable. Home Group took advantage of such a loan to retrofit some of their properties near Cumbria enabling residents to reduce the amount they spend on bills from around £7 per day to around £0.70, which is especially beneficial given the current economic situation and challenges faced by their residents.

Clearly retrofitting existing social homes helps to make them more energy efficient, cutting back on the emissions which are produced through energy consumption and contributes towards achieving net zero. Whilst the reduction of emissions and energy usage are good enough reasons to carry out these works, there is also significant social value in retrofitting existing homes so that residents have access to warm, high-quality homes. For example, research has shown that poor quality housing costs the NHS £1.4 billion a year and that for every £1 spent on warming the homes of vulnerable people £4 is saved by the NHS.

Retrofitting also helps achieve the core purpose of social housing, providing secure, affordable accommodation for those that need it, and whilst councils assist in keeping rent low, housing can still become unaffordable and if residents can’t afford to keep their house warm, problems with damp and mould are more likely to develop.

RPs have reported that challenges with retrofitting include: uncertainty around retrofitting policies making it harder for them to plan effectively as they lack confidence that policy won’t change, a shortage of qualified professionals available for both installing and maintaining energy efficient technology and the fact that there is no-one size fits all approach to the types of technology which can be used for the various types of properties for which they are responsible.

Additionally, a report carried out by law firm Shakespeare Martineau found that only 46% of social housing residents surveyed had any form of energy saving technology installed in their homes despite 86% of residents expressing interest in making the homes more efficient. However, the reason for this isn’t due to a lack of enthusiasm on the part of the RPs but issues with how funding is accessed, timescales allowed to utilise the funding and the aforementioned skills gap. The same report found that the younger the resident the more likely they were to have requested and received  some retrofitting works carried out to the property : this shows the importance of RPs engaging and educating their residents to increase proactivity on their part.

It is also important to remember that RPs have other organisational priorities which make it difficult to invest and focus on retrofitting existing properties whilst also e.g. having to manage building safety remediation.

It is important to note that registered providers are already heavily investing in this area compared to private housing and are driving much of the innovation in this area, as a result 64.3% of the social housing properties already have an EPC rating of C or above compared to 35.6% of owner-occupied homes.

Whilst there is a clear national requirement to build sustainable homes at pace and scale if the country is to achieve net zero, there is still the need to continue to retrofit existing housing. The cost of retrofitting is significantly lower and can be achieved much quicker than building new sustainable housing and it is important that the two run in parallel. The average new-build property emits just one-third the carbon of a typical older house and it is important that older homes are updated in line with this so as not be a carbon and financial drain.