Home retrofit progress blocked by financial barriers – leading sector voice calls for urgent Government and finance industry action

A leading retrofit advice service has called on the UK government and finance industry to take action as new research reveals home retrofits are being blocked by a lack of attractive financial options for homeowners.  

While research indicates that 79% of people are concerned about climate change in the UK⁽¹⁾, this isn’t enough to see homeowners dip into their own pockets to make energy efficiency upgrades to their own homes. This spells more warning signs for the UK’s journey towards net zero and a low-carbon economy.  

According to findings from Ecofurb, which provides impartial expert advice on home retrofits, and its Home Retrofit Trends Index, UK homeowners named financial reasons as the top barrier preventing them from making home improvements, with 53% citing high upfront costs and 22% blaming a lack of grants and financial incentives⁽²⁾.   

The news comes as the UK government is set to outline its Warm Homes Plan in Spring, which will see key measures introduced for improving energy efficiency across the housing market. But, homeowners waiting for the perfect policy to come along to fully fund their energy-efficiency improvements may be waiting a long time. However, there is a range of financial support available, such as green finance with interest-free loans, as well as lenders offering larger mortgages for those buying a property with a higher EPC rating.  

Ecofurb’s Russell Smith also predicts we may see a new incentive introduced as part of the UK government’s Warm Homes Plan, offering homeowners a rebate on their stamp duty if they improve the energy performance of their property.  

But, Smith believes financial providers should already be incentivising this, and wants the government to go even further: “There are a number of factors which have led to this misconception that retrofit is expensive, which is holding homeowners back. This isn’t the only reason why there has been an under-delivery of retrofitting across UK housing stock, and there are plenty of non-financial barriers which cannot be addressed by new financial incentives alone.  

“Firstly, uncertainty in government policy has meant suppliers are not investing in the market. Of course, the change in government has a part in this, but that doesn’t account for the numerous start/stop nature of schemes and consultations, and the short timeframes for the introduction of new policies which puts great pressure on current resources. I believe the Government needs to improve its communication of the benefits of the Net Zero transition, and welcome the announcement of a Public Participation Strategy in 2025.  Across the UK, we have excellent local or regional initiatives, but as these work independently, it leaves so many areas under-served. We need a national body to help the low-carbon transition which includes financial lenders and a plan for everyone’s home.”  

In December 2024, it was revealed the government is planning a reform to its EPC framework, which Russell Smith also backs: “The methodology that goes into calculating the EPC of a property is actually pretty robust, but where I believe it needs an overhaul is the certificate aspect. The EPC certificate is fine for giving a quick and comparable indicator which helps people to decide whether to buy or rent a property, giving them an indication of how much the house will cost to run. However, it doesn’t provide enough context for the longer-term future and investment in a property. For example, the recommendations given for improving the EPC rating are not tailored for each property and overlook certain retrofit options like heat pumps and battery and solar. This means homeowners are not able to make an informed decision when it comes to their potential retrofit options, resulting in homeowners becoming overwhelmed with misinformation.  

“What I hope to see as part of the new EPC framework is a consistent metric that is fair and comparable, as well as a change to the validity period so it is no longer based on 10 years, as a lot can change in this time. I’d also like to see more focus put on giving advice, beyond EPCs, that is relevant to the homeowners, taking into account the homeowner’s wants and needs, their budget and the potential disruption to their daily life.”  

As homeowners look set to stall on making energy-efficiency improvements and reducing their home’s carbon footprint, what they’re also missing out on are the other benefits. These include a more comfortable and healthier home to live in all year round, an increase in the property’s resale value, and savings on energy bills.  

Ecofurb’s Russell Smith continued: “Homeowners may think retrofitting is expensive, but every day of delay is a missed opportunity to save money, enjoy greater comfort and future-proof against unpredictable costs and climate conditions. Now is the time to take control of your home’s future.”  

To find out more about Ecofurb’s Home Retrofit Trends Index, aimed at uncovering trends within the home improvement market, please visit: https://ecofurb.com/home-retrofit-trends-index.