Article first published in Society Matters magazine, Dec 2023

Despite the Prime Minister’s relaxation of some Net Zero measures, there is an air of inevitability in the housing sector when it comes to home energy improvements. Rishi Sunak announced a delay in phasing out home fossil fuel heat sources to 2035, an exemption for roughly one-fifth of homes when that requirement does come into force, and the scrapping of proposed minimum energy efficiency standards for the private rented sector. 

However, the sector continues to press on in the face of a two inescapable truths:

1. Residential housing accounts for 17%¹ of the UK’s total emissions ; and
2. Our 2050 Net Zero commitment is enshrined in law. Meeting that commitment will require a herculean effort to decarbonise housing.

The Government even realises the scope of the challenge, simultaneously announcing increased grants for heat pump installations whilst walking back other requirements. The goal is clear but the path to reach it is not.  

The question for building societies, then, is how best to support their members in ensuring a transition to Net Zero. As with the broader challenge of decarbonisation there is no single answer, and innovative solutions will be required from across the sector. Many of our members are already exploring ways to help.

The Hinckley and Rugby is partnering with a vendor to deliver a one-stop-shop model for home retrofits. The proposition is currently being rolled out to existing customers. The customer journey developed there will guide and support members from the beginning of a project through the completion and verification of works.

The Leeds has incorporated energy efficiency into its affordability model to reflect the running-cost savings from efficient new builds. Lower energy bills translate into higher affordability and lending potential.

The Skipton and the Melton are offering free EPC Plus assessments to their members along with retrofit coordination services.

The Ecology has partnered with sustainable offsite MMC homebuilders and has introduced innovative green mortgages that deliver greater discounts for higher levels of efficiency.

The Nationwide is testing a 0% green additional borrowing product. A number of members are providing energy savings tools and recommendations for home improvements through partnership with the Energy Saving Trust. The list goes on.   

Members are also working together through the BSA Green Finance Taskforce. The group is working to drive greater take-up of green finance products and increase home retrofits by calling for a comprehensive decarbonisation strategy from Government and improving consumer awareness and engagement. 

The common theme underpinning each of these efforts reflects the motivation that has animated building societies from their inception: to support their communities and members in meaningful ways.

Whilst mutuals have evolved dramatically in the 250 years since the founding of the first building society, the concept of mutuality still pervades and ensures our members’ commitment to their communities. The ways this commitment is manifested will continue to evolve, but it will remain important to meet the modern challenges facing communities and home owners. The inevitability of decarbonisation means that households that may already be struggling to meet rising energy prices and mortgage costs may be asked to shoulder another burden of decarbonising their homes. Building societies can play a crucial role in easing this burden and supporting members as they always have. 

¹Department for Energy Security, & Net Zero, 2022 UK greenhouse gas emissions, provisional figures.