Autumn Budget misses the green mark, claims property industry

During yesterday’s Autumn Budget, the chancellor of the exchequer Rishi Sunak pledged £3.9bn to decarbonise buildings in England and Wales as part of the government’s ‘build back greener’ strategy to meet net zero targets.

The total funds include £1.8bn allocated to supporting tens of thousands of low-income households to make the transition to net zero while reducing their energy bills.

The £3.9bn of new funding to ensure buildings are warmer and cheaper to heat will be allocated to government schemes as follows:

  • £1.425bn through the Public Sector Decarbonisation Scheme
  • £950m for the Home Upgrade Grant Scheme
  • £800m for the Social Housing Decarbonisation Fund
  • £450m for the Boiler Upgrade Scheme — announced last week
  • £338m for the Heat Network Transformation Programme

The government is also expanding the Nature for Climate Fund to spend more than £750m by 2024-25 to help meet its commitment to plant at least 7,500 hectares of trees every year in England by 2025 and restore 35,000 hectares of peatland. 

This is in addition to public investment to support its aim to halt biodiversity loss by 2030.

However, many industry experts were disappointed by the Budget speech, claiming that the government still has a long way to go in order to reach net zero.

Dean Markall, sales and marketing director at Martin Grant Homes, said: “It’s shocking that despite predictions of an overwhelmingly green Budget, the chancellor has barely given climate change a nod. 

“We anticipated that we would see a lot of hot air coming from the government, but instead there has been barely a breeze — perhaps this encapsulates exactly why the delivery of an entirely greener Britain simply hasn’t been thought through. 

“While housebuilders will rightly so bear a lot of responsibility for helping the government to meet its green targets, the real problem on hand is that the vast majority of homes in the country are older and do not have the infrastructure to cope with drastic modern adaptions. 

“It is right that the government enforces strict building regulations on new homes as they are built, but there needs to be greater consideration for how the country’s older housing stock can economically adapt.”

Brian Berry, chief executive at the FMB, shared Dean’s view, claiming that the chancellor missed the opportunity to give householders peace of mind about how they can tackle the net zero challenge.

“With nothing on retrofit for owner occupiers in last week’s Heat and Buildings Strategy, I’m struggling to see how the country will reach its legally binding net zero targets by 2050 if it doesn’t fix the UK’s 29 million leaky homes,” he added.

Simon Cox, managing director and founder of Walter Cooper, commented: “The plan for clean heat is a great first step, but further direction is needed.

“Recent research from the National Housing Federation found that housing associations alone need at least £36bn to be able to carry our retrofitting plans, so I am wondering how far £800m can really go.

“The entire property industry feels the responsibility to build sustainability, however it’s all cost prohibited — currently, green homes are too expensive to build and too expensive to buy. 

“As technology and manufacturing in the green sector improves over the next decade, the scales may start to shift but, as it stands, the numbers don’t work; we need to get the manufacturing process significantly cheaper. 

“Retrofitting green boilers is so much harder than adding in tech solutions on new builds as part of the build. 

“Fix the problems of the future before trying to fix the past, or we will continue to cause ourselves problems.”

When discussing possible solutions to alleviate these issues, Simon suggested that the government could introduce a minimum standard for all new-build schemes in which 50% of homes on a site need to be self-sustaining through renewables.

“It won’t work on a small scale, but the big housebuilders which are creating developments of over 100 units can do this and set the bar for others to follow, and buyers will love this, avoiding massively fluctuating bills seen in the current gas shortage,” he explained.

“The green agenda is long term and needs a long-term plan that neither penalises homeowners nor discourages housebuilders from building the homes we still desperately need. 

“Last time Rishi took a very short-term view, and it seems like we’re in for more of the same; with another election not too far away, the question is how to stop the ship from sinking?”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, also agreed that more governmental help would have been welcomed with regard to energy efficiency.

“Good EPC ratings are still not a high enough priority for aspiring or existing homeowners, but tax breaks might increase energy efficiency and retrofitting supported by green mortgages and more generous green homes grants,” he noted.

“However, it's important to not reduce the value or saleability of older, unmodernised properties, or discourage their improvement.”

While many industry experts feel that the government should offer more support to help with the decarbonisation of the development sector, Kush Rawal, director of residential investment at SO Resi; and Lynda Clark, CEO at First Time Buyer Group, highlighted the importance of ensuring that green homes are not only energy-efficient, but also affordable — particularly for first-time buyers.

“It is important that we strike a balance and that the government ensures a move to green living remains affordable for both the consumer and housing provider, otherwise we risk creating a two-tier society where being sustainable is only for those who can afford it,” said Kush.

Lynda added: “It is very encouraging to see the focus shift onto sustainable, green homes, and this is what the housing industry now needs to ensure it plays its part. 

“It is my hope that sustainable housing doesn’t have to mean unaffordable housing — and that first-time buyers aren’t hindered further when trying to step onto the property ladder. 

“Certainly, more energy efficient homes will save on the bills in the long run, but we need to ensure that first-time buyers can still enter the market to benefit from these savings.

“Many renters or young professionals with the goal of owning their own home continue to be at a disadvantage and, as much as we can, we need to try and make sure this is a level playing field.”  

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