Feature: The £1.5bn retrofitting project – what it means for local authorities and registered providers

The Government has committed £1.5 billion of funding to retrofit existing housing stock currently held by local authorities and registered social housing providers to rapidly improve energy efficiency. With the recent announcement that the energy price cap will now end in April, this retrofitting programme has become more vital than ever to ensure that people are able to keep themselves warm and healthy over the winter months. Whilst the social housing sector has been a leader in retrofitting homes for some time, this extra funding will boost activity, with a view to helping achieve the Government’s net zero targets by 2050.

Acting on industry feedback from previous phases of support, the Government is assisting registered providers who are hoping to access this funding through the social housing retrofit accelerator, funded by the department for business, energy and industrial strategy, speeding up the application process and improving the chances of success. The time that successful applicants have to access the money has been lengthened too, reducing wasted efforts and mitigating the risk of having to repeat applications.

With this support, access to the fund should be relatively straightforward, however, before a registered provider or local authority begins an application, it is important that they seek to understand the housing stock that falls within their remit. By conducting a stock condition survey as part of a larger asset management strategy that will help them to understand factors such as the location of the housing stock, its age and condition, registered providers and local authorities can then make informed plans as to how best to utilise their funds. The results of the survey will demonstrate cost-effectiveness and help them to understand whether retrofitting is the right path, or whether it would be more cost-effective to conduct stock transfers and rationalisation exercises.

Data from the survey might reveal that selling stock to another registered provider with a better geographical footprint to implement any retrofitting programmes will provide a more beneficial outcome. It may also show that there is a better business case for demolishing housing stock that is unfit for habitation and rebuilding according to green principles. It is important to note that many registered providers who dispose of stock will be required to replace it on a 1:1 basis, an important factor when making these strategic decisions.

Conducting a stock condition survey will also help registered providers and local authorities understand how best to utilise the funding to make the biggest impact. In projects such as these, a one size fits all approach is not appropriate, as requirements may vary vastly between houses. Whilst it is possible that there may be clusters of houses that have similar needs, perhaps based on their age or architectural style, a blanket approach to retrofitting would quickly prove impossible.

To combat these potential pain points and to make the most of the available funding, it is vital to develop a robust retrofitting policy that takes considerations from across the business, such as the current state of housing stock, into account. This policy will allow informed decisions to be made more quickly and will help registered providers and local authorities to create a sustainable approach to achieve their retrofitting goals.

It is also important that local authorities and registered providers seek to understand what further assistance is available to them, to support the overarching retrofitting strategy. Collaboration will be key to ensuring the process is a success, and all parties should take a thorough approach to

appointing commercial partners who will be able to carry out the work without going over budget. Additionally, it could be beneficial to find an Environmental Social and Governance (ESG) funding partner with a specific retrofitting remit to provide additional monetary support to the project.

If managed properly, this scheme will go a long way to make up for the loss of the Green Homes Grant, which required upfront investment into a property that many simply could not afford, rendering it unfit for purpose. However, as this scheme continues, it is important to note that it is still very much a voluntary process, and no firm regulation or legislation for future-proofing and building green homes has yet been enforced in the UK.

This may change as the 2050 target approaches; however, it is vital for all parties within the built environment industry to realise that regardless of legislation or regulation, the net zero targets will not be going away. Tools including carbon calculators that can accurately calculate the embodied carbon cost of a building project will help to guide construction companies to build homes that are compliant with the ambitious net zero targets, and incentivisation in the wider industry that might include preferential mortgage rates for green homeowners will further drive this activity.

To ensure that the retrofitting project has the greatest chance of success, some joined-up thinking within the built environment sector is required. From construction and surveying to mortgage lending, there are a number of ways that old homes can be improved, and new homes future-proofed. As more local authorities and registered providers access this funding, this collaboration will begin to create a clearer picture of how the industry as a whole can move forward and achieve a greener future.