Kate Davies is executive director of IMLA
The historic COP26 conference has just come to an end, and it has once again brought the green agenda to the fore.
Large-scale efforts to tackle climate change must be coordinated on a global level, but each country will have to take steps to ensure they are acting in a sustainable and environmentally friendly way. Within each nation, companies, sectors, and individuals all have a crucial role to play.
Intermediary caseload volumes reaches highest ever recorded level in Q3
In Britain, the government has announced ambitious targets for carbon reduction – namely cutting emissions to “net zero” by 2050. To achieve this, all parts of the economy will need to make changes – especially the housing sector.
Homes currently contribute to 15% of the UK’s annual emissions – a figure which rises to 22% if energy generation is factored in. This figure can be reduced substantially, but will require government support for homeowners and landlords.
The Green Homes Grant was a good idea in theory, but was not sufficiently consulted on or thought-through, which resulted in its being abandoned before it had been able to achieve much.
The programme needs to return in a rejuvenated form, which includes further funding and plans to ensure that the country has enough registered tradespeople to carry out this crucial work, and that proper standards are specified and approved.
The UK’s housing stock is old – and retrofitting older properties to ensure they meet modern standards will not come cheap. Homeowners who can’t afford to carry out improvements will need loans or grants – it will be important that those who live in properties which are harder to upgrade are not disproportionately disadvantaged.
The government has announced plans to incentivise people to install low-carbon heating systems as they replace their old boilers over the coming decade.
From April 2021 onwards, households have been able to benefit from up to £5,000 in grants to help install low-carbon heating systems, such as heat pumps, as part of more than £3.9bn of new funding to decarbonise heat and buildings.
This may make some inroads into the overall target, but not all properties are suitable for heat pumps and some questions remain about the how effective they are in providing sufficient heat.
The Department for Business, Energy, and Industrial Strategy (BEIS) has consulted on proposals to set minimum energy efficiency standards for rented homes with effect from 2025 for new tenancies and 2028 for all tenancies.
BEIS has also proposed requiring lenders to collate information on the energy efficiency of all properties mortgaged to them and calculate the overall “average” EPC rating of their mortgage book.
IMLA has expressed concern that too strong a focus on average efficiency ratings, and in particular the setting of targets for lenders to “achieve” could lead to some lenders limiting their lending on properties with low EPC ratings.
This could make it harder for homeowners to remortgage or sell their home in the future – through no fault of their own – if they cannot afford to carry out improvement works.
We need to avoid a “Catch-22” where homeowners are unable to spend money upgrading their property because they are paying higher energy bills, together with higher than average monthly mortgage repayments, because they live in a less energy-efficient properties and therefore do not qualifying for a lower mortgage rate and can’t afford to make the necessary improvements.
Building for the future
Post COP26, policymakers must bring together the green initiatives currently in operation and create a more joined-up approach to sustainability.
The current approach has been too piecemeal, with good ideas failing to be rolled into a long-term plan. We can start by increasing consumer information and education about how to improve energy efficiency and the carbon – and cash – savings that can realistically be achieved.
But retrofitting homes which are, in some cases, more than 100 years old is only one approach. Another, which has the potential to reach hundreds of thousands – if not millions – of properties, is to concentrate on cheaper clean energy generation.
This would avoid penalising owners of older homes who can’t afford or are unable to make their property super-efficient. It would also help all property owners – irrespective of whether they own outright or with a mortgage or are landlords (or tenants). Enabling everyone to access cheap, reliable green energy feels like a logical development.
In 2020 the government unveiled a ten-point green plan looking at ways to boost hydrogen production. This included the goal of heating a town entirely by hydrogen by the end of the decade.
The landmark report unveiled at COP26 by the International Renewable Energy Agency and the World Economic Forum set out 38 ‘enabling measures’ that will help cut the cost of renewable H2 in Europe and underpin a trustworthy international market.
We must follow through on these ambitious plans to overhaul our energy supply chain, particularly in light of the recent crisis affecting the cost of gas supplies.
We urgently need a coherent strategy for Britain’s energy policy: once this is established, willing industries such as the housing and mortgage sector will be better placed to innovate and support homeowners in their quest to create sustainable homes. COP26 will help raise awareness but now we must all act.