Housing associations’ record on retrofit – the latest stats and what they mean for tenants
The UK is facing a cold winter of soaring energy prices. Yet new figures, collected by Inside Housing, reveal that work to improve the insulation of social homes, which could cut bills, is far below what is needed. Jess McCabe reports on who is doing what. Illustration by David Procter
Energy bills for the average household are expected to reach £400 a month by January. If this happens, 10 million people will likely be plunged into fuel poverty. Insulating Britain’s homes has never been more urgent.
But an investigation by Inside Housing has found that many housing associations are carrying out few retrofits. These include jobs such as wall, floor or door insulation, and double or triple glazing, which would make those homes much cheaper for tenants to heat.
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Thirty-three housing associations provided Inside Housing with detailed data on the retrofit work they are doing. These landlords collectively own or manage more than 960,000 homes, and can give a good indication of the state of the sector. Yet between them they carried out only 694 external wall insulation (EWI) jobs in 2021-22. They insulated the cavity walls of only 2,463 homes.
Other measures are also being carried out only on a small scale. Looking to their plans for the next five years, the 33 landlords expect to complete just over 16,000 EWI projects, and another 14,000 cavity walls. Given that these associations are looking after almost one million homes, it is clear there is a long way to go.
“I wish I could do a lot more faster,” says Karin Stockerl, director of asset strategy and services at Optivo. “I’m really concerned about the bills that will hit our residents. Millions of people are already in debt [to their energy suppliers]. What will this look like in January?”
Optivo has 10,000 homes under Energy Performance Certificate (EPC) Band C, out of 45,000 in total.
The landlord is concentrating on getting all stock to EPC Band C by 2030, the main target set by government for English landlords. “We very quickly need to get to B and better,” Ms Stockerl adds.
“We are starting to see… residents asking, ‘Can you insulate my home?’” she says. But what is happening more often is that residents are asking the landlord to cap their gas – turning off the supply to their home.
Everyone Inside Housing spoke to for this story also mentioned the link between fuel poverty this winter and worsening disrepair, mould and damp. This is because homes that are not adequately heated are much more likely to have these problems, and putting the heating on is a first line of treatment for damp.
“People might be tempted to not turn their heating on and you have more instances of damp and mould,” Ms Stockerl says.
Doug Bacon, director of asset management at Thirteen, says: “From an asset perspective, the first cold snap you’re going to have I would say, across the country, tens of thousands of people are not going to put their heating on, and after three weeks that will do some damage to the house.”
He adds: “We’re a charity, as you know – we have a responsibility to protect the charitable asset. But actually, what’s the best and easiest way to do that? The easiest way is to pay the energy [bill].”
Work carried out in 2021-22
2,854
Loft insulation jobs
795
Heat pump installations
186
Whole-house retrofits
694
External wall insulation jobs
2,463
Cavity wall insulation jobs
The scale of mould and damp problems “could overwhelm most housing associations, just being able to deal with the volume, because you won’t be able to get around to them quick enough. And then at the same time, if you start paying the bills in November, which is quite a lot [of money], we’re just going to be paying them through until February”, Mr Bacon says.
He estimates that 10,000 of Thirteen’s homes – roughly a third – will need upgrading to meet the 2030 target, because they are under EPC Band C, and “in one shape or form” all its homes will need work doing by 2050, when the UK is meant to reach net zero.
With winter only months away, landlords tell Inside Housing that they are looking at what they can do faster. Because it takes a long time to survey properties, plan work, find suppliers and carry out jobs properly, they cannot hope to solve this winter’s problem. Thirteen is looking at the potential to quickly install solar PV and batteries without government funding. This could take a chunk out of residents’ electricity bills, even if it does not make their homes warmer or cheaper to heat.
“I’m really concerned about the bills that will hit our residents. Millions of people are already in debt. What will this look like in January?”
Supply chain issues and inflation are also limiting what landlords can do, they say. Abri, which intends to invest £40m in the next five years, up from £500,000 last year, is typical in saying: “In the current economic climate, planning for retrofit projects is extremely challenging, with both building material cost inflation and scarce labour combining to push up prices.”
So, how did we get into this situation? National statistics show that annual rates of insulation dropped off a cliff in 2012 and have yet to recover. This was caused by a change in government policy when the Conservative-Liberal Democrat coalition came to power: the new government replaced Labour’s energy policy with the Energy Company Obligation (ECO) and the Green Deal. The amount of work being done collapsed – 1.16 million lofts were insulated in 2012, dropping 93% to just 110,000 in 2013 when the policy changed.
Work planned for the next five years, to March 2027
16,233
External wall insulation jobs
30,363
Loft insulation jobs
6,859
Heat pump installations
6,153
Whole-house retrofits
26,449
Glazing improvements
14,106
Cavity wall insulation jobs
6,911
Mechanical heat recovery ventilation jobs
14,428
Other building fabric measures (eg insulated floors and doors)
18,784
Other projects
For those who did get work done through ECO, it has been a success. Jonathan Newton, sustainability and environment manager at Progress Housing Group, says that roughly 2,000 of its 12,000 homes are below EPC Band C. “We’ve had 10 years of funding for those low-cost measures. A lot of the easy-to-insulate lofts and cavity walls, the vast majority of our properties have already been done,” he says.
The work will now turn to the more difficult properties: awkward solid-wall homes, houses pepper-potted on a street with other housing, and homes where the insulation was done, but perhaps not to the best standard and needs revisiting. Progress Housing Group is aiming to apply for Wave 2 of the Social Housing Decarbonisation Fund, which, if it is successful, would see work start in April next year.
Saffron carried out no EWI and no cavity wall insulation last year, and plans to insulate only 10 solid walls in the next five years. But this is because the bulk of the work on its 6,400 homes is already done under previous energy company-funded schemes.
“We’re assuming we might get 10% or 15% of the total bill [in subsidy], but the rest is coming from somewhere else. And the somewhere else is then, in my view, the key to unlocking volume”
Yet many landlords still have significant numbers of homes that need bringing up to EPC Band C by 2030 – and ultimately to zero carbon by 2050.
The coalition government pinned a lot of hope on the Green Deal. If it worked, it could have seen 14 million homes insulated by 2020. Unfortunately, the policy flopped and was scrapped only two years later.
Social landlords and consultants close to the sector pin the failure to retrofit more social homes on a lack of policy direction from government, and a lack of funding.
Fast forward to today, and the current funding regime in England is the Social Housing Decarbonisation Fund, which proposes to invest £3.8bn over 10 years. Housing associations say that the funding needs to be more long term, and the policy and regulatory landscape set to unlock more investment. To put this in perspective, Inside Housing’s analysis found that the total cost to decarbonise homes is likely to be more than £100bn. Clarion alone estimates its bill at £1bn.
“We’re assuming we might get 10% or 15% of the total bill [in subsidy], but the rest is coming from somewhere else. And the somewhere else is then, in my view, the key to unlocking volume,” says Mr Bacon.
What three associations are doing
LiveWest (38,465 homes)
- Investing in the next five years: £40m, of which it hopes 20% will be subsidised by government
- In 2021-22, it installed external wall insulation (EWI) in no homes
- It carried out 209 cavity wall insulation jobs
- It installed 104 heat pumps
- In the next five years, it plans to install EWI in 293 homes
- It plans to install cavity wall insulation in 1,589 homes
- It plans to install 325 heat pumps
Stonewater (34,500 homes)
- Investing in the next five years: £25m, of which it expects £10m to be subsidised by government
- In 2021-22, it installed 350 insulated doors
- It did 210 cavity wall insulation jobs and one EWI job
- It installed 25 solar PVs and 25 heat pumps
- Over the next five years, it expects to install 1,200 insulated doors and put floor insulation in 200 homes
- It plans to carry out 882 cavity wall insulation jobs and 329 EWI jobs
- It plans to install 750 solar PVs and 1,050 heat pumps
Wheatley Group (61,656 homes)
- Investing in the next five years: £100m. Wheatley says it is too soon to say how much will be subsidy
- In 2021-22, it improved glazing in 1,546 homes
- It carried out 194 EWI jobs and 229 cavity wall insulation jobs
- Over the next five years, it expects to carry out 449 EWI jobs and improve the glazing in 4,235 homes
- It says 90% of its homes are EPC Band C or better
A report in June by the Climate Change Committee (CCC) was scathing about the UK’s progress, saying: “Given soaring energy bills, there is a shocking gap in policy for better insulated homes.”
The body, which monitors progress towards net zero, continued: “The UK continues to have some of the leakiest homes in Europe and installations of insulation remain at rock bottom.”
The CCC says that 15 million UK homes must get one of the main insulation measures – wall, floor or roof insulation – and that all fuel-poor homes should receive an energy-efficiency upgrade.
One of the biggest figures of planned investment came from Wheatley Group in Scotland. The association put the figure at £100m for sustainability initiatives by 2027, saying “most of this investment will improve the energy efficiency of existing homes, including the installation of low-carbon heating upgrades”.
Scotland’s Energy Efficiency Standard for Social Housing requires all social housing to meet EPC Band B by December 2032, although there are some caveats about cost, technology and consent.
The scale of the problem facing social tenants and landlords is huge. Last year, the Committee on Fuel Poverty found evidence of 79,000 fuel-poor households living in English social homes with an EPC of Band E, F or G. Another 738,000 fuel-poor social households were in Band D homes. Technicalities in the definition of fuel poverty mean that anyone living in a Band C home cannot be counted as in fuel poverty in England.
“The fuel crisis and the cost of living crisis will bring this into all the boardrooms more and more”
Those numbers are set to get much worse. National Energy Action (NEA), a campaign group on fuel poverty and warm homes, estimates the total number of people in the UK in fuel poverty has already risen substantially to 6.5 million today. The government has announced a £400 grant for energy bills, plus additional subsidy for people on means-tested benefits, pensioners, and people on certain disability benefits. But NEA still estimates that numbers in fuel poverty will reach 8.8 million households in October when the energy price cap is raised, and more than 10 million households in January, when prices are projected to rise again.
Social landlords know they have a big job to do. Ms Stockerl from Optivo also chairs the decarbonisation group at the G15 group of large London landlords. “Most of them now are really gearing up, and are building capacity and capability internally,” she says. “Increasingly what we see is people having roadmaps, and working very closely with their exec teams and boards and having that vision and buy-in.”
Retrofit was already going up the agenda because of the pressure from the sector’s funders to deliver on environmental, social and governance goals. And, Ms Stockerl says: “The fuel crisis and the cost of living crisis will bring this into all the boardrooms more and more.”
Tenants facing a cold, hard winter will be looking to see when roadmaps turn into action.
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