England’s homes have as large a carbon footprint as our petrol and diesel powered cars according to a new report out this morning
The Think tank Resolution Foundation says that the key policy task for the 2020s is finding a way of decarbonising millions of homes without leaving poorer households behind
Leaky walls will add an extra £350 to energy bills between Jan and April 2022.
Progress has been made in the past – home insulations peaked at 1.6 million in 2012 – but these efforts were focused on easier options of improving lofts and windows, not wall insulation.
The report found that Four-in-ten homes in England – nine million homes in total – have walls rated as poor or very poor, compared with two-in-ten homes with inefficient roofs, and one-in-ten homes with poorly-graded windows
Leaky walls are the biggest challenge for England’s energy efficiency drive & radical steps are needed to support less affluent families with home improvements
The ‘leaky wall’ problem is particularly difficult because the financial incentive to tackle it is very weak for home-owners. The cost of wall insulation averages £8,000, and it can take 18 years to recoup upfront costs. The shock of high energy bills is unlikely therefore to persuade enough people to improve their homes in this way.
Rather than repeating another failed incentive scheme for home improvements, or putting the entire nationwide wall insulation onto the state, the report calls for a radical new ‘carrot and stick’ approach – combining targeted financial help for home improvements with a ban on poorly insulated homes by 2035.
The report says with leaky homes often concentrated in less affluent neighbourhoods, targeted financial support will be vital for those who simply can’t afford vital home improvements. A means test that takes account of households’ income and assets in order to determine eligibility, such as the one used in social care, could be used to determine who receives access to state support.
For example, setting a ceiling for support for households with £250,000 of assets (such as property wealth), and a floor below which the state pays for households with assets under £100,000 and incomes under £30,000, would mean that around half of home-owners would pay in full for home insulation, around one-in-ten would have their costs fully covered by the state, and the remaining two-in-five would receive a sliding scale of state support. This would push around three quarters (71 per cent) of the costs onto property owners, requiring up to £1.8 billion per year of state funding over the next decade.
The ‘stick’ should be a new regulation setting a hard deadline for homes to meet energy efficiency standards. The Government should mandate that all homes must be EPC C rated for energy efficiency by 2035. This approach has been successful before, with the introduction of minimum energy efficiency standards in private rented homes in 2018 driving the number of poorly insulated rented properties down from 30 per cent of new tenancies to 10 per cent almost overnight.
Enforcement of this requirement should be targeted at times when they are least disruptive, such as between tenancies or when people are moving into their new home. The cost of improvements could be added to existing mortgage agreements or house price negotiations.
None of this will be achievable, the authors note, without overcoming workforce issues that have proved terminal to recent insulation schemes. As such, the Government should focus on skilling up the wider construction force in retrofit techniques (especially wall insulation) and training retrofit coordinators in parts of the country with greatest need.
Jonny Marshall, Senior Economist at the Resolution Foundation, said:
“England’s homes have as large a carbon footprint as our petrol and diesel powered cars. The key policy task for the 2020s is finding a way of decarbonising millions of homes without leaving poorer households behind or burdening them with unaffordable costs.
“Previous approaches such as cheap loans have failed to deliver improvements at scale, and the biggest barrier to energy efficient homes has been largely ignored: our leaky walls. The sheer cost of insulating Britain’s walls means that the state cannot be expected to foot the bill entirely.
“Instead, a new carrot and stick approach is needed to ensure that England’s nine million leaky homes are upgraded. Mandating that all homes must be energy efficient by 2035 can spur home-owners and landlords into action, while a new means test could help around half of households with at least some of the costs of the upgrades, and all of the costs for those with the lowest means.”
