UK Finance has released a new report Unlocking Demand for Green Home Finance which highlights the need for a comprehensive strategy to increase demand for green home improvements.
As uptake of technologies such as insulation, heat pumps, and solar panels remains low, the report calls for a blend of targeted policy measures, public information campaigns, and advisory services to encourage homeowners, landlords, and housing associations to retrofit their properties.
The report draws on YouGov research to show the attitudes of UK consumers specifically towards heat pump technology. The UK needs to install around 1.5 million heat pumps per year by 2035 to meet its carbon reduction goals, yet consumer adoption rates fall very short of these targets.
This research found that:
+ 54% said the main barrier discouraging them from getting a heat pump was the high up-front cost
+ 44% said they would switch if they were provided with a clear idea of the savings in running costs
Encouraging green home upgrades however requires more than financing, it needs behavioral change supported by clear government action.
The report sets out nine recommendations which we believe should be embedded within the government’s upcoming Warm Homes Plan:
+ Establish a government-led body or group to drive collaboration across key stakeholders
+ Provide certainty for firms involved in retrofitting
+ Launch a public awareness campaign with independent guidance to counter misinformation
+ Provide grants, subsidies, and a coordinated plan to train sufficient tradespeople
+ Rebalance electricity and gas prices through adjustments to levies/ targeted support
+ Deploy government funding to enable lower-cost green home lending
+ Maintain and expand grant programmes to support green home improvements
+ Set clear long-term expectations so households and firms can prepare
+ Update energy efficiency metrics for accurate property performance and consistency
Ian Bhullar, director of sustainability policy at UK Finance, said: “To meet our ambitious targets on greening the UK’s housing stock we need to drive demand and convince the public of the benefits. Lenders are committed to playing their part and through the government’s Warm Homes Plan we have the opportunity to really make a difference. Increasing demand for green home improvements will bring significant benefits, stimulate job creation, drive innovation, and reinforce the UK’s energy security in an increasingly volatile global market.”
Responding to the latest UK Finance reports, Toby Leek, NAEA Propertymark President, commented: “Propertymark has always advocated for low-carbon heating systems that include heat pumps as a central component of achieving net zero. However, it is clear that costs are a barrier for many people when it comes to switching to these low carbon alternative means to heat their homes.
“There are many government schemes out there, such as the Boiler Upgrade Scheme that gives households in England and Wales £7,500 towards replacing their old boiler system with a heat pump. At the same time, it is vital that the UK government and the devolved administrations avoid a one-size-fits-all approach towards energy efficiency, as for example, older properties are not always able to add heat pumps, something that Propertymark will continue to campaign for.”
