Chancellor urged to invest £2.3bn a year to insulate millions of low-value homes

A group of senior housing figures have urged the chancellor Rishi Sunak to commit £2.3bn a year to insulating homes in England over the next decade.

The Building Back Britain Commission (BBBC) says that without radical action to improve energy efficiency the government will be “fighting a losing battle” on both net zero and energy bills. 

The commission claims that an average of at least £200 a year could be saved on a home’s energy bills by moving it from an EPC rating of band D to band C. But, according to the commission’s research, retrofit measures to fix this are not financially viable for homes worth less than £162,000.

The problem is more acute in poorer communities – identified in the commission’s report as “levelling up” areas – where more than a third of homes fall under the threshold.

Across England, there are more than 2.3 million homes which are valued at less than £162,000, have an EPC rating below C and are located in these poorer areas.

The highest concentration is in the north of England, with Blackpool, Burnley and Hyndburn in Lancashire topping the list for areas with the greatest proportion of such homes.

The BBBC is an independent group which includes the chief executives of Barratt Developments, Legal & General, Mace, Thakeham, NHBC and Riverside Group. Its chair, Terrie Alafat, said the government needed to get serious about tackling the cost-of-living crisis by improving energy efficiency.

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“Without this, the government will always be fighting a losing battle on both net zero and energy bills,” he said. “But, by working with industry and following the steps that we suggest, it could yet have a win-win”.

Alafat, who is also the chair of the Riverside Group, added: “In the long term, taking decisive action now to make our homes more energy efficient will enable the UK to make much-needed strides forwards on the path towards net zero.

“In the short term, it will also mean lower fuel bills for millions of people who are suffering as a result of the energy crisis and urgently need help with the cost of living.”

Jason Millett, chief executive for the consultancy business at Mace, said: “Our report reveals the full scale of the challenge around housing and net zero, along with ambitious yet realistic steps for achieving net zero emissions in the UK by 2050.

”The retrofit imperative is clear, and it is essential that the government commits funding to create greener, safer homes.”