"Both industry and the Government need to act to improve the energy efficiency of our homes."

Andrew Asaam
Mortgage Director, Lloyds Banking Group
18 February 2022
4 min read

 

£693. It’s a big number. For many people across the UK that’s how much extra it is going to cost per year to heat their homes as the fuel cost cap increases.

The unfortunate truth is that people in colder, less energy efficient homes will feel this increase more sharply. In order to better protect ourselves against such increases in future, as well as reducing the impact of our homes on the environment, both industry and the Government need to act to improve the energy efficiency of our homes.



It's going to cost many people across the UK an extra

£693

per year to heat their homes as the fuel cost cap increases.
 


 

How important is EPC rating to homeowners?

The good news is that our research suggests that energy efficiency is increasingly something people are looking at when choosing where to live.

While demand for bigger gardens and more living space have become staples of the post-pandemic housing market, more efficient heating and environmental features (such as a good EPC rating) are the next two most sought after features. Four in five people see energy efficiency as important, and a similar number consider having heat retention systems, such as energy efficient glazing, beneficial.

However, only one in three are looking at making improvements to the energy efficiency of their homes. With 15 million homes in England and Wales needing changes to get to an EPC rating of C, that’s not enough.

 

What’s stopping people from making their homes more energy efficient?

When we ask the public why, the story isn’t new. Phrases such as “cost”, “lack of time” and “don’t know where to start” crop up over and over again. Those looking to move see little advantage, and those renting see works as the responsibility of their landlord or housing association. In fact, when we asked the question on social media, around two thirds of people said cost was the biggest barrier to making homes more energy efficient.

The challenge is clear. We need to help make improving the energy efficiency of homes as simple and cost-efficient as possible.

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"The challenge is clear. We need to help make improving the energy efficiency of homes as simple and cost-efficient as possible."

Making energy-efficient changes simple

As a financial services company, we know we are only part of the solution. However, we consider it an important part of how we can help Britain recover.

Currently, we are focussed on making it easier for our customers to realise the benefits of more energy-efficient homes. Last week, we launched our Green Living Reward across a number of our brands, giving mortgage customers up to £1000 cashback when making energy efficiency improvements. All they have to do is provide us with a tradesperson’s invoice to claim the cashback. Simple.
 

Partnering with the Energy Saving Trust

Knowing where to start can also be a challenge. That’s why we have teamed up with the Energy Saving Trust to provide a free online Home Energy Saving Tool and Home Energy Efficiency Helpline to help Halifax customers understand the changes they could make and how much they could save from lower bills. Again, simple.



 We launched our Green Living Reward across a number of our brands, giving mortgage customers up to

£1000

cashback when making energy efficiency improvements.


 

Changing the green homes landscape

Product innovation is only part of the equation. The Government has acknowledged that it needs to do more to reach its target of improving as many homes as practical to EPC Band C by 2035. Initiatives such as the ‘– the Green Home Grant and the ‘Renewable Heat Incentive Scheme’ which closes to new applications on 31 March have been a step in the right direction, but issues around public take-up have been well documented.

The promise of grants that reduce the cost of installing low carbon sources of heat from April, as set out in the recent Heat and Buildings strategy, will hopefully be enough of an incentive for those who can already afford to upgrade their gas boiler. However, it remains to be seen whether this intervention will be of the scale required to meet the Government’s target of 600,000 heat pump installations per year by 2028.

Fundamentally, we need to put energy performance at the heart of the housing market. Doing so of course won’t be simple – but one idea is that we could start by looking at how the tax system, and in particular the stamp duty regime, could be reformed to incentivise buyers to retro-fit their new homes. Making adjustments so that home movers pay less tax on  energy efficient properties could help owners realise the financial benefits of energy efficiency improvements made to their homes, thereby encouraging more work to be undertaken.

Of course this would not be a ‘magic green bullet’, and would need to be part of a comprehensive policy and funding landscape that both protects those on lower incomes living in poor quality accommodation and is matched by the scaling up of the retro-fit supply chain.

As we look to navigate our way out of the pandemic, across the industry we have to come together to do more to support people as they look to reduce living costs and transition to a low-carbon economy. That journey starts at home.

 

Andrew Asaam
About the author Andrew Asaam

Mortgage Director, Lloyds Banking Group

Andrew Asaam is a banking professional with over 25 years' experience working in financial services.

During this time he has covered a number of areas including M&A, multi-year change, credit risk and P&L ownership. Andrew is currently the Mortgages Director for LBG covering all brands and channels.

During his career he has held various leadership roles including Director of Mortgage and General Insurance at Virgin Money and as Credit Risk Director at TSB looking after all retail and business banking products.

Andrew's background Close

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