UK Finance calls for action to drive demand for green home upgrades

UK Finance today releases 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 per cent said the main barrier discouraging them from getting a heat pump was the high up-front cost

44 per cent 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:

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.

Area of expertise:

Sustainability