Incentives to decarbonise housing should be tailored to local property prices in order to ensure that poorer areas, like many in so called northern “red wall”, are not left behind, a new report has argued.
The study, entitled Lagging Behind: energy efficiency in low-viability properties and published on Thursday (21 October) by local government thinktank Localis, said there are dramatic variations in the ratio between home retrofit costs and property prices across England.
In Burnley, for example, the standard £24,000 cost of retrofitting a home is equivalent to a quarter of the median house price of £99,500.
Nearly four-in-five dwellings must be retrofitted to attain EPC Grade C standards in the Lancashire mill town, according to the report.
By contrast, retrofit costs in the Royal London Borough of Kensington and Chelsea work out at just 1.8% of the median house price of £1.3 million.
There is a risk of deepening economic inequality if these regional variations in property costs are not factored into the incentivises for owners to meet national net zero targets, the report warned.
“In areas with low-viability properties, the greatest challenge is with incentivising landlords and homeowners to take up the task of retrofitting their properties.
“The challenge of incentivising homeowners and landlords to retrofit their properties will be made more difficult if the costs involved prove to be too much, especially in areas with low property values.”
Regional variations in uptake of home retrofits could lead to households in poorer parts of the country facing a greater risk of fuel poverty, the report said: “A universalist approach risks creating a local divide between those who can and cannot upgrade to net-zero energy and heating standards, with the consequences for those in the latter category manifesting in deepening fuel poverty because of continued reliance on inefficient methods of gas and fossil fuel heating.”
The report recommended giving a stronger role for local planning and collaboration in boosting the energy efficiency of low-value properties.
It also said the Department for Business, Energy and Industrial Strategy should frontload the £3.8 billion Social Housing Decarbonisation Fund.
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.”