There are 29 million homes in the UK, and in total they represent almost a quarter (23%) of the UK’s carbon emissions. It’s a stark fact that if the UK is to meet its net-zero by 2050 commitment practically every home requires some form of retrofitting. The challenge of achieving this cannot be under-estimated, and everyone involved in the housing market has a role in helping to make the changes needed. 

New research from the Building Societies Association shows that many homeowners are put off making energy efficiency improvements to their home with the biggest barriers being meeting the upfront costs (cited by 51%) and thinking it will take too long to recover those costs (also 51%).   

Lack of knowledge is also deterring homeowners from making improvements, with 37% saying they don’t know how much money the  improvements will save them. When asked what would encourage them to make energy-saving changes, around a third said clearer information (34%) and reassurance about the quality of the work (31%).  Other motivators would be a cheaper energy tariff (57%), a lower council tax rate (53%), a cheaper mortgage (32%) and evidence that the improvements will add value to the home (38%). 

Most people acknowledge that some energy efficiency improvements will add to a property’s value and around half confirmed they have made some changes to their property in the last 12 months, although the most popular are the cheapest options such as replacing lighting with low energy alternatives. 

For some of the more costly improvements, that will generally have the biggest impact, there’s a big difference between those who have considered them and those that have actually gone ahead. For example, in the last 12 months 17% have considered installing solar panels, but just 6% have done it, and 9% have considered installing renewable energy sources, such as heat pumps, but only 5% have done so.

Generally, there are three motivators that would encourage a homeowner to make energy efficiency improvements to their property – cost, comfort or conscience. The massive jump in energy prices which has seen UK electricity costs go from the second lowest in the EU15 (as it was) to the fourth highest in the last 20 years, and which will rise again in April, means actions to reduce usage is likely to have the biggest pull in encouraging homeowners to make improvements. 

However, as home improvements that significantly reduce energy usage are expensive, the most opportune times for implementing them is when people are already accessing funding and/or planning other home improvements – whether that’s when they take a mortgage to buy a new home or when they re-mortgage.  For both these transactions the vast majority will engage their mortgage broker, making the intermediary well-placed to guide homeowners on actions that will help decarbonise their property. 

As there’s no simple one-size-fits-all solution to decarbonising homes, the Green Finance Institute (GFI) has invested in resources that help to educate brokers and equip them with the knowledge to confidently provide guidance and support to clients on decarbonising their specific home.

• The GFI Broker Handbook provides information on different green home retrofit solutions and technologies, including their opportunities and risks and quality assurance standards. 

• The GFI Certificate in Green Mortgages, is a CPD accredited course which covers the impact of climate change, specifically on UK housing, as well as the broader green finance landscape; the role of housing in tackling climate change; emerging technology, grant funding and EPCs.

There is clearly lots to do to improve the energy efficiency of the UK housing stock, and change won’t happen overnight.  The research shows that homeowners have an appetite to make improvements but are seeking education, information and funding before taking action. 

A Government-led strategy, including details of any incentives that may be coming down the line would be a good starting point, but as there is no indication of this happening any time soon, we shouldn’t sit back waiting for it. There’s a lot that mortgage brokers can do now to start helping their clients on a journey to warmer, cheaper to run and more environmentally-friendly homes. 

This article was first published in Mortgage Strategy