‘One size fits all’ approach to retrofitting nation’s homes risks widening economic inequality in ‘red wall’ areas, Localis report warns
Failure to factor in huge regional variations in property costs when incentivising homeowners and landlords to retrofit their properties to meet national net zero targets risks deepening economic inequality , the think-tank Localis has claimed.
In a report published today entitled ‘Lagging Behind: energy efficiency in low-viability properties’ Localis urges the government to give serious consideration to the impact of regional variability in house prices and dwelling stock when installing heat pumps to hit decarbonisation targets.
According to the report, in some local authority areas of the north and midlands, the estimated costs of improving home energy are can be around one 25% of property values, while in affluent parts of London and the south east retrofitting with heat pumps represents less than 2% of overall property value.
For example in the red wall constituency of Burnley, where nearly four-in-five dwellings need to attain EPC Grade C standards, standard retrofitting costs of £24,000 are equivalent to a quarter of median house prices of £99,500. However, in the Royal London Borough of Kensington and Chelsea, where median house prices are £1,317,500, retrofitting costs are equivalent to a mere 1.8% of overall property values.
Localis calls on councils, especially in ‘red wall’ areas where property values are low, to collaborate in creating ‘one stop shops’ as joint ventures which would engage with residential landlords to retrofit at pace, and make use of aggregated scale to devise bespoke solution that met local need and personal circumstances.
Other report recommendations include calls for:
- local authorities to come up with local retrofit jobs strategies to make use of skills and supply chain opportunities;
- central government to provide clear and concise information and timelines as well as more readily understood incentives;
- The Department for Business, Energy and Industrial Strategy to frontload the £3.8bn Social Housing Decarbonations Fund Demonstrator to deliver cost savings through acting at scale.
Localis Chief Executive, Jonathan Werran, said: “Without a tailored and localised approach that considers the varying housing economics of each locality, a ‘one size fits all’ approach to funding retrofitting threatens to deepen regional inequality and counter efforts to level up in red wall areas.
“If the challenge of how to effectively support retrofit properties in low value areas is not met, we risk creating a dangerous divide between different parts of the country.”
Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “With a higher proportion of older stock than other housing tenures, the private rented sector has some of the biggest challenges in meeting the Government’s energy efficiency and decarbonisation ambitions. We therefore welcome news that landlords can access grants to transition to low carbon heating.
“We support the recommendation in this report that extra help should be given to owners of low value properties to make it viable for them to invest in energy efficiency measures and urge the Government to act accordingly.”
Propertymark Policy and Campaigns Manager, Timothy Douglas, said: “A ‘one-sized fits all’ approach rarely works in any policy implementation but when dealing with affordability and property this is particularly true.
“When we look at property value against the estimated cost of retrofit improvements for energy efficiency, we see a stark geographical divide making the feasibility of carrying out works required unequal across the country.
“This means that those living in lower value areas will be penalised when they are unable to afford the measures needed to bring their homes in line with UK Government targets.
“To avoid regional inequality the research recommends a greater degree of strategic planning by local authorities to develop frameworks to help with affordability and spark local economic growth through collaborative working, developing skills, creating green jobs and utilising existing supply chains.”