National Housing Federation responds to net zero target revisions

National Housing Federation responds to net zero target revisions

The government updates its approach to how the UK will meet net zero by 2050

The chief executive of the National Housing Federation has written an open letter urging the government to recommit to their net zero manifesto pledge in the upcoming Autumn Statement.

It follows the Prime Minister’s decision to revise targets on the UK’s path to reaching net zero. 

Announcing the changes, Rishi Sunak, vowed to take “a pragmatic, proportionate and realistic” path to reach net zero by 2050, reducing costs on British families while still meeting international commitments.

A summary of the revised plans states the Government will:

  • Move back the ban on the sale of new petrol and diesel cars by five years, so all sales of new cars from 2035 will be zero emission. This will enable families to wait to take advantage of falling prices over the coming decade if they wish to.
  • Delay the ban on installing oil and LPG boilers, and new coal heating, for off-gas-grid homes to 2035, instead of phasing them out from 2026. Many of these homes are not suitable for heat pumps, so this ensures homeowners are not having to spend around £10-15,000 on upgrading their homes in just three years’ time.
  • Set an exemption to the phase out of fossil fuel boilers, including gas, in 2035, so that households who will most struggle to make the switch to heat pumps or other low-carbon alternatives won’t have to do so. This is expected to cover about a fifth of homes, including off-gas-grid homes – those that will need expensive retrofitting or a very large electricity connection.
  • Scrap policies to force landlords to upgrade the energy efficiency of their properties, but instead continue to encourage households to do so where they can.
  • Raise the Boiler Upgrade Grant by 50% to £7,500 to help households who want to replace their gas boilers with a low-carbon alternative like a heat pump.
  • Rule out policy ideas that would require people to share cars, eat less meat and dairy, be taxed to discourage their flying, or have seven bins to hit recycling targets – removing worrying proposals that would interfere in the way people live their lives.

The letter from the National Housing Federation was addressed to both the Chancellor, Jeremy Hunt and the Secretary of State for the Department for Energy Security and Net Zero, Claire Countinho:

Dear Chancellor/Secretary of State

RE: Social Housing Decarbonisation Fund and minimum energy efficiency standards

On behalf of the National Housing Federation and our housing association members across England, I am writing to ask you to recommit to the full £3.8bn Social Housing Decarbonisation Fund (SHDF), as committed in the government’s manifesto, in the upcoming Autumn Statement.

We would also welcome a consultation on minimum energy efficiency standards (MEES) in the social housing sector.

Unlocking potential by releasing the full Social Housing Decarbonisation Fund 

Housing associations are committed to the vital work of retrofitting their homes, not only to help the country meet its net zero targets, but also to provide energy efficient and comfortable homes for their residents that are affordable to heat.

Funding is crucial to enabling the housing association sector to lead the transition to net zero. The sector plans to invest £70bn by 2050 in the fabric, heating systems and components of their existing homes. However, analysis from Savills estimates that decarbonising all existing housing association homes will require at least an additional £36bn of investment, in addition to the £70bn already planned. This figure is likely to be even higher now as a result of inflation across the supply chain.

The SHDF provides a strong start to filling that gap and we have been very pleased to work closely with your officials on the design of the scheme. We strongly welcomed the £778m awarded earlier this year as part of Wave 2.1 of the SHDF and would like to see Wave 3 come forward imminently to enable social housing providers to continue the good work they are doing to decarbonise their properties.

We would also like to see a long-term commitment to decarbonising our housing stock, by securing the full remaining SHDF beyond 2025 from the £6bn allocated in the November 2022 Autumn Statement. This would unlock supply chains and provide the regulatory certainty for housing associations to plan, contract for and deliver the large-scale retrofit projects required to meet net zero by 2050.

The need for a clear regulatory roadmap for energy efficiency

Many housing associations are already working towards EPC C by 2030, with 69.8% of housing association homes at EPC A – C. A clear regulatory roadmap for energy efficiency standards would help further this work. We would therefore welcome a consultation on minimum energy efficiency standards (MEES) in the social housing sector. Any legislative targets proposed will need to be aligned with housing associations’ current decarbonisation strategies and matched with adequate levels of funding to ensure social housing providers have the resources to meet any new obligations.

A reformed EPC metric would also help to ensure the right retrofit measures are incentivised, facilitating a ‘no regrets’ approach to this work and aligning MEES with the approach followed by government funding programmes such as the SHDF, as well as government’s 2050 net zero target. It would also help to inform residents of all homes of the social and financial benefits that decarbonising their homes will have for them and prepare them for the changes that will be needed on the journey to net zero.

Collectively, the recommitment to the full Social Housing Decarbonisation Fund and a clear regulatory roadmap for minimum energy efficiency standards would provide the certainty the social housing sector needs to deliver the retrofit and decarbonisation required to meet the country’s net zero target. This is why we are calling on you to make these commitments in the upcoming Autumn Statement.

Yours sincerely,

Kate Henderson
Chief Executive
National Housing Federation