Prime minister Sunak’s net zero U-turn and what it means for housing
Last Wednesday, Rishi Sunak announced several changes to the UK’s approach to transitioning to net zero. The measures announced covered a range of topics including electric vehicles, energy infrastructure, consumption taxes and housing. The announcements relating to housing, heating and energy efficiency are laid out below.
Energy Efficiency
Strengthening energy efficiency requirements in the private rental sector (PRS) has been a key part of a wider programme of work to develop a fairer and better private rental sector, alongside the proposed abolition of Section 21 (‘no fault’) evictions and the application of the Decent Homes Standard to the PRS for the first time. Government proposals to introduce a requirement for privately rented homes to have an EPC rating of ‘C’ or above by 2026 for existing tenancies, and by 2028 for new tenancies, were first consulted on in 2021.
Last Wednesday the prime minister abandoned these proposals, announcing there would no longer be any Minimum Energy Efficiency Standards (MEES) introduced for homes in the Private Rental Sector (PRS) and that government would “never force any household” to make energy efficiency upgrades.
This is an incredibly disappointing move and leaves significant questions as to how government plans to decarbonise one of the most energy inefficient housing tenures both nationally and in the North. Across the North, 61.7% of homes in the PRS currently fail to achieve an EPC rating of ‘C’ or above, compared to 45.3% in the socially rented sector. Considering such statistics, government should be doubling down and being ambitious on increasing the energy efficiency of privately rented homes rather than retreating as the prime minister has done.
Heating
The first heating-related policy change from the prime minister is that the ban on the sale of new oil, Liquid Petroleum Gas (LPG) and coal heating systems for off-grid homes is to be pushed back to 2035. This was previously set to come into force from 2026 and will impact around 1.7m homes across the country, mostly in rural areas.
The ban on installing gas boilers in new-build homes, and the wider ban on installing any new gas boilers both remain where they currently are, in the years 2025 and 2035 respectively. Sunak also announced that there will be exemptions granted for “households who will most struggle to make the switch to heat pumps or other low-carbon alternatives”. It is not yet known how a system of exemptions will work, but it is thought that it will cover approximately 20% of existing homes.
Despite some changes to planned timescales, the government remains committed to their target of installing 600,000 heat pumps per year by 2028. Approximately 55,000 installations took place last year – one of the lowest installation rates in Europe – meaning that supply chains and installations will need to ramp up significantly in the next five years if we are to stand any chance of meeting such a target. Even still, the Climate Change Committee suggests that to reach net zero by 2050, the UK will need to install 900,000 heat pumps per year.
To boost the installation of renewable heating systems, the Boiler Upgrade Scheme, which offers grants to replace gas boilers with renewable heating systems such as heat pumps, and has seen low uptake from homeowners, has been given additional funds to increase the maximum grant per household from £5,000 to £7,500.
According to the most recent Census, only 6.6% of households across the North heat their homes solely using electricity, compared to 78.4% of households whose only source of heating is mains gas. The North faces an immense challenge to substantially change these numbers, fully decarbonise our homes and complete the transition to zero-carbon heating. To do so effectively, we need both policy stability and funding to support the transition. The increases to the Boiler Upgrade Scheme are certainly welcome, but the government will need to go further to support the take-up of renewable heating systems and to support housing providers and homeowners in retrofitting properties to increase energy efficiency. The Northern Housing Consortium have previously called for a long-term funding commitment of £6bn per year across all tenures. This ambitious level of investment would give housing providers confidence that support will be there for the long-term, and to allow supply chains and skills providers to scale up and deliver warmer homes and cheaper bills for residents, as well as reducing our carbon emissions.
