£330bn: the cost of turning UK’s homes green
Hitting green targets will cost billions
Britain faces a £330 billion bill if it wants all homes to meet 2035 green energy targets, according to new research.
Property agent Savills says there are “particular difficulties” facing the residential sector due to its scale and the need to incentivise owner-occupiers to make improvements.
Whilst the commercial sector in general has specific advantages that will ease the challenge, the firm identifies “major obstacles to upgrading the retail sector”.
The residential sector is responsible for a fifth of the UK’s carbon emissions (67.7m tonnes emitted in 2020, up 9% between 2014 and 2020).
The vast majority (70%) of this comes from heating properties – the bulk of the issue lies with older homes that present the greatest challenge.
However, payback on many energy improvements remains unattractive. Savills says it will take approximately 36 years to recoup the cost of improving a D rated home to B standard via savings on energy bills.
As such, Savills suggests that grants and green finance initiatives alone are unlikely to facilitate the step-change in investment in energy efficiency needed to meet government targets.
Discounts and surcharges on discount-specific taxes such as stamp duty and council tax could be among the measures considered.
As a whole, commercial property is considered to be less challenging due to much of it being institutionally-owned, and the role the investment community is taking in pushing for change.