Net Zero Homes: actions towards a reset

COP27 is fast approaching, and invariably the political and financial worlds are turning again to the issues created by climate change.

Earlier this year I wrote about the ambitions that had been set out by UK governments in the Strategy for Net Zero, Heat and Buildings Strategy, and similarly-named Heat in Buildings Strategy. I explained that the mortgage lending industry supported these strategies, but that we needed a clear, step-by-step, fully funded plan for delivery.

Since then, UK Finance has been working with a wide range of stakeholders to bring together a comprehensive report setting out proposals for a delivery plan.

Our Net Zero Homes: Time For A Reset report contains a detailed analysis of where we are, where we want to get to, and how this can be achieved. It takes a close look at the current government policy approach and provides an in-depth consideration of the issues we face in achieving Net Zero Homes – including our housing stock, consumer attitudes, and data deficiencies.

It provides a sobering look at the risks involved if we fail to deliver. In particular, the possibility of a new set of climate-related ‘property prisoners’, who may face difficulties selling or mortgaging their homes because they are unable to reach the standards required by law or regulation.

Mortgage lenders cannot solve this conundrum alone– not least because the majority of properties are socially rented or owned outright.

One area we can certainly help is funding. This includes green mortgages which provide additional borrowing to homeowners to carry out green retrofitting or charge lower rates of interest for properties that are energy efficient. Available since 2006, they are now provided by an increasingly large number of lenders. We go beyond that too, considering customer communications and the role banking and finance can play in a number of ways. These include as a trusted third party, in the provision of data, and by using broader banking tools like securitisation and commercial funding for SMEs carrying out work.

Funding alone is not however enough. For all this to work, the right environment needs to be created. The recommendations in our report are intended to inspire action and create demand, deliver the funding needed to meet this demand, and to redefine standards to ensure we are fit for the future. The details of these can be seen below.

Every month that slips by makes it harder to hit our targets. This in turn makes reaching our Net Zero goal less likely. It actually makes it more likely that we will see negative unintended consequences and, ultimately that homeowners will not make the changes required to prevent cataclysmic climate change. What we need now is progress –and fast. We will be pushing for that in the coming weeks and months.

The report’s recommendations are to:  


  • Establish a government-led delivery body to drive collaboration across key stakeholders.
  • Create an advisory service to provide homeowners with independent retrofitting advice.
  • Provide certainty for firms involved in retrofitting with long-term public policies.


  • Prioritise public funding to improve energy efficiency in social housing.
  • Support vulnerable people with the costs of energy efficiency improvements.
  • Use Stamp Duty to incentivise retrofitting measures.
  • Provide grants and subsidies to upskill tradespeople.


  • Ensure energy performance methodologies for buildings are fit for purpose.
  • Implement minimum energy efficiency requirements for homes.
  • Mandate hydrogen-ready boilers when a natural gas boiler needs replacing.
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