It is estimated that four out of five homes to be occupied in 2050 have already been built. The social housing sector is on the right track: 56% of existing social rented homes have an EPC rating of A to C, compared with only 33% of private rented homes. However, for the sector to achieve the UK Government’s net zero target by 2050, social housing providers have to think carefully about their existing stock and begin to implement necessary retrofit upgrades now.
New research from Altair, commissioned by GC Business Growth Hub in Manchester, suggests UK affordable housing providers will continue to face significant barriers to meeting the Government’s decarbonisation target if leaders fail to act. Housing providers are calling for greater certainty around finance, and more information about the long-term running costs and performance of modern technologies for retrofitting homes. This article highlights the current challenges facing implementation of low-carbon retrofit initiatives among social housing providers and makes recommendations to Government to provide greater clarity to the sector.
Insights in this article are derived from engagement with 15 Greater Manchester Housing Providers (GMHPs), whose social housing stock within Greater Manchester represents around 55% of Greater Manchester’s total social housing stock.
Direction is required
Altair’s research found that organisations vary tremendously in their green retrofit activities. Some organisations do what they can to meet targets while others deploy organisation-wide mandates to achieve as close as possible to 100% zero carbon homes.
Regulatory and other standards are of vital importance to GMHPs’ adoption of green technologies. 93% of providers indicated that “future-proofing for higher energy efficiency and building standards” is a primary incentive for a shift to using green technologies, and 86% said “regulatory and building standards” are similarly vital.
However, a lack of consistency in legislation and policy has inhibited skills development in vital areas required to deliver zero carbon homes. Building and other regulations strongly influence the way all developers, including social housing developers, specify and build housing. While building regulations provide a framework of standards for works required to run existing properties, there is inadequate guidance on retrofit to encourage real, positive change.
Proactive leadership within each organisation
Delegating low-carbon responsibilities to sustainability managers or similar is a common strategy for actioning decarbonisation goals. As one might expect, organisations with a dedicated team or resource to action green strategies generally undertake a higher number of decarbonisation activities and have a higher level of impact. But even for smaller organisations who can’t dedicate a staff member or team to decarbonisation activities can implement the lesson that ownership of green priorities by staff enables programme continuity and fosters organisational embedding of a “low carbon attitude”.
Also, having dedicated, experienced staff working with supportive executive teams and boards helps foster creative and innovative environments which test new technologies and approaches and learn for the future. This is best achieved when organisations view green initiatives (and the work of their sustainability officers or teams) as part of the ‘status quo’ or an integral element of their organisation’s approach to areas such as planned maintenance.
Access to finance
Green finance is vital for housing providers and consumers alike to adopt green technologies. Our research reveals that, where possible, providers use in-house resource to apply for funding. Some providers, however, acknowledge that they lack knowledge about what funding is available and how to access it. We also noted practical, avoidable barriers such as short timescales to apply for funding.
One of the most significant sources of funding is the Domestic Renewable Heat Incentive (RHI), a Government financial scheme to promote the use of renewable heat. One provider commented that RHI funding enabled them to pilot air source heating in ten properties, and another confirmed that RHI funding bridged the financing gap between installing gas boilers and air source heat pumps.
With several regulatory and policy changes in the last 15 years, including the move away from gas, even organisations with the capital are reluctant to fund adoption of “green technologies” without assurance on where they should be investing in future.
Undoubtedly more could be done to increase available finance and signposting to accessible capital. Government could look to widen the scope of finance, for example by including water efficiency, flood and other resilience measures in digital green passports and EPC ratings. In addition, Government could implement the Green Finance Taskforce’s recommendations around green mortgages and green loans to encourage uptake and support financing of high-quality homes.
Support from all levels
A key theme of the research is the vast array of approaches housing providers have adopted to decarbonise their homes at an organisation or partnership level. What is missing is a joined-up approach with better information and certainty over what is expected in the future. In the absence of a roadmap from Government, we recommend housing providers invest time and resource to build a dedicated team to design their organisational carbon zero strategy. We also recommend providers leverage sector partnerships and groups to share learning. A coordinated approach will help increase efficiencies across asset management activities, drive economies of scale, and ensure better decision-making. It is recommended these strategies are sponsored by boards and executives but are designed and implemented by staff who understand the practicability and cost implications of delivering zero carbon homes.
Certainty and funding to deliver will not happen until providers collaborate to lobby Government. A zero carbon Britain in 2050 relies on policy today that guides developers, housing providers and residents to implement and maintain retrofit interventions. For providers to achieve all of their goals, such as building homes, investing in communities and meeting sustainability targets, the next step is joining together to convey a clear message to Government.
About the Research
Altair, commissioned by the GC Business Growth Hub in Greater Manchester, undertook research to understand the barriers and opportunities for the use of green technologies by Greater Manchester affordable housing providers (GMHPs)*. To access the full report click here.
GC Business Growth Hub had the following to say about Altair’s work:
Altair worked collaboratively with GC Business Growth Hub and the project sponsor Robin Lawler, CEO of Northwards Housing to engage with Greater Manchester’s social housing providers to analyse their use of green technologies now and in the future. The team from Altair worked well as our partners and kept us updated throughout the project on progress and findings as they emerged. Altair added value to the project through their understanding of the social housing sector, at operational and strategic levels, enabling them to have meaningful conversations with asset managers and developers. Altair’s report brings together sector context with research findings, making clear, practical recommendations to the appropriate stakeholders. As a result, the report not only informs and supports the green technologies and services supply chain, but it also shows the social housing sector how to overcome barriers to meet national carbon reduction targets. We would be pleased to work again with Altair in the future.
*Greater Manchester Housing Providers comprise 24 housing associations, arm’s-length management organisations (ALMOs) and a local authority housing provider with significant operations within Greater Manchester.