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How Do Housing Providers Budget for Net Zero?

With Net-Zero requirements inching closer, how are housing providers across the country meant to budget for this potentially massive but necessary expense?

Lauren Grimes
Lauren Grimes

Jul 02, 2021

One of the biggest concerns surrounding the government’s outlined Net-Zero policy is the overall cost. According to Inside Housing, the approximate cost to decarbonise the social housing sector will be a whopping £104 billion — this is enough money to pay the rent for all Social Housing tenants in England for five whole years. With figures like this in mind, it is no wonder that housing providers are getting worried. While some funding is available, for example a grant of £50 million has been set aside to help improve the energy efficiency of the UK’s 2,000 worst performing homes, it is nowhere near enough and with so many providers competing for funding it just isn’t sustainable as a solution.

With this in mind, it is easy to be disheartened by the concept of decarbonisation as a whole and to forget the long-term benefits it will deliver. But evidence shows us that by building more EPC efficient properties, housing providers will see significant reductions to their overall costs in the long run. In minimising energy wastage across their stock, providers will be able to reap the benefits, making the upfront costs a worthwhile investment.

The first stage for housing providers preparing for Net Zero is to invest in a system that allows them to accurately gauge their current carbon emissions. By installing remote sensor technologies such as the Smart Thermostat across their stock, providers can remotely monitor their property performance and gain a key insight into their homes. This gives the provider the ability to target the most inefficient properties first, thereby boosting the overall grade of EPC rating that their properties have. Data collection paints a digital picture of a property — giving providers a greater insight into their stock and allows them to lessen some of the negative effects new carbon reduction measures can cause. This, in turn, can also alert providers to individual cases where energy is being wasted and allow them to address the cause on a one-to-one basis.

According to The National Housing Federation (NHF), 74% of its members view funding as the biggest barrier to retrofitting work, while 56% went on to say that a lack of clarity in government policy was making it difficult to plan effectively. It is true that there is a limited amount of funding available for providers. The Conservative party were quick to promise a grant of £3.8billion to be put towards decarbonisation in their 2019 manifesto, addressing calls for more financial aid. However, since then, not much has been realised. After the scrapping of the Green Homes grant, in which the Government had promised £1.5billion to help with improvements to inefficient properties, providers are losing faith in their ability to make Net Zero a reality.

However, there is still hope.

According to Net Zero Live, a replacement for the Green Homes grant is set to be announced as part of the Autumn spending review as a senior figure in the Construction Leadership Council’s net zero team has revealed. With the government declaring their commitment to Net Zero at the 2018 Paris Climate Agreement and sustainability being a key topic of conversation at the recent G7 summit, this upcoming grant may be a turning point in government policy regarding decarbonisation. Yet even with the upfront costs, all evidence shows that building energy efficient properties and investing in sustainable retrofits will lower costs for providers in the long-run and will have the added benefit of creating more jobs which will, in turn, boost the economy.

In the immediate term, technology seems to be the most viable solution for lowering financial costs as well as reducing carbon emissions. When used effectively, it can help to counteract large-scale emissions, aiding in the pursuit of a carbon neutral housing sector. Through the widescale use of technology, housing providers now have the ability to remotely monitor their stock and gain key insight into the energy performance of individual homes, allowing for data-driven decision making. This allows housing managers to validate how well their interventions have performed to provide proof of energy efficiency improvements. By relying on technology and making data driven decisions, housing providers can focus their attentions on the most vulnerable properties, helping them to use their budget both strategically and effectively.

Read our guide on building an effective net-zero strategy
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Lauren Grimes

Lauren Thornton-Grimes is Switchee’s PR and Marketing Executive. She has a keen interest in Social housing and is focused on educating the housing industry on solutions to some of it's biggest problems. She has a Masters in Creative Writing from the University of Winchester.

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