Keeping up momentum on plans to upgrade UK homes

Following manifesto pledges to bring energy upgrades to 5 million homes and double investment to £13.2 billion, in September the Government pushed forward its Warm Homes Plan by announcing the new Warm Homes: Local Grant scheme, continued support for existing schemes aimed at decarbonising social housing and the public sector, and plans to consult on bringing roughly one million private and social rented homes up to EPC C by 2030. 

Last month, the Government went further with several new announcements: 

• Warm Homes Plan funding will help upgrade up to 300,000 homes in the 2025-26 fiscal year, and will include £88m for the Warm Homes: Local Grant scheme and £374m for the Warm Homes: Social Housing Fund. 
• Funding for the Boiler Upgrade Scheme will increase by an extra £30m this fiscal year, with £295m earmarked for the next. 
• The ‘1m rule,’ which in England requires planning permission to install heat pumps within 1 meter of a neighbouring property, will be removed from early next year. 
• The Clean Heat Market Mechanism (CHMM), which is designed to incentivise investment in heat pump supply chains by obligating manufacturers to meet sales targets, will come into effect as planned on 1 April 2025. 

We welcome these announcements, several of which appear in our own Energy Manifesto, but if the Government is to succeed in reducing the 1/5th of UK emissions that are generated by residential buildings, this progress must continue. 

The next steps towards decarbonising UK homes 

The Government’s announcements are creating a solid foundation on which to build an enduring framework for upgrading the UK’s housing stock, but to make good on the promise of keeping people’s homes warm, their consumption green, and their bills low, several additional steps must now be taken. 

While continued support for the Boiler Upgrade Scheme (BUS) is welcome, it could be significantly enhanced by improved access to more long-term low-cost green financing to help homeowners afford the portion of installation that is not covered by a grant. This point is already mentioned in the Labour manifesto, but the Government could use the upcoming Spending Review to promote green finance and enable credible, longer-term plans for keeping up with a growing number of heat pump sales under the Clean Heat Market Mechanism.  

To ensure future progress, the Government could also follow up on its planned consultation around the tightening of minimum energy efficiency standards for rented properties - which represent roughly 20% of all properties in the UK - and in so doing could make a significant dent in total domestic emissions. 

While pursuing these standards and plans, a remaining goal should be to harmonise various schemes such as ECO4, GBIS, and BUS so that they complement rather than compete with each other. This may involve reexamining eligibility, standards, and long-term planning to ensure that supply chains remain stable and homes can be upgraded in a cost-effective way, but it will also require recognition of the role played by supplier obligations in delivering upgrades at scale, and continued support to keep them running into the future. At the same time, a clear decision on the role of hydrogen for home heating would serve to reassure the heat pump market and provide consumer confidence on the direction of clean heating. 

Working together to upgrade more British homes 

The commitments in the Labour Manifesto together with the plans put forward in the Autumn Budget and subsequent announcements are encouraging  when it comes to upgrading the UK’s homes, and with this momentum established there is an opportunity to keep things moving and ensure further gains in the future. 

As an energy supplier working on a number of existing schemes, we are here to lend our expertise and help the Government in any way we can to secure future progress, upgrade millions more British homes, and bring down household energy bills across the country. 

For more information on how our customers can access home upgrades, go here.