Localis warns of regional variability in boosting energy efficiency

Jake Carter

October 21, 2021

Think tank Localis has urged the government to give consideration to the impact of regional variability in house prices and stock when installing heat pumps to hit decarbonisation targets.

In a report titled ‘Lagging Behind: energy efficiency in low-viability properties’, it revealed that in some local authority areas of the North and Midlands, the estimated cost of improving a home’s energy efficiency is around 25% of the property value.

However, in affluent parts of London and the South East, retrofitting with heat pumps represents less than 2% of overall property value.

For example in Burnley, where nearly four in five dwellings need to attain Energy Performance Certificate (EPC) Grade C, 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 1.8% of overall property values.

Localis has called 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.

Jonathan Werran, chief executive of Localis, 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 (NRLA), added: “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.”

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