Between £52 billion and £70 billion to upgrade Britain’s ageing housing stock could be unlocked through the introduction of property linked finance, research has said.
Some £360 billion will have to be spent on retrofitting Britain’s existing buildings to bring them in line with 2050 net zero targets, according to think tank the Green Finance Institute.
Just where this funding will come from remains in question, with the institute explaining homeowners were often deterred from spending on insulation and greener energy systems due to the costs of having to take out finance.
As such a scheme whereby finance is linked to homes rather than owners could offer a solution, the institute claimed in a report, given people could rid themselves of any debt upon selling homes.
“The UK has some of the oldest and least energy efficient homes in Europe, with buildings responsible for around 23% of annual greenhouse gas emissions,” the report said.
“Transfer of the payment obligation overcomes a key challenge of existing energy efficiency upgrades.”
As things stand, homeowners considering moving often avoid making home energy improvements since they won’t benefit from such investment in the long term.
Property linked finance could be modelled on the US property-assessed clean energy scheme in which funds collected via property tax and then linked to specific buildings, with the current owner then given charge of using the funds for upgrades.
According to the group, the US scheme has raised US$13 billion to fund housing upgrades since first being introduced in the mid-2000s.
Though a UK version would unlikely be based on taxation, the institute said such property-linked finance could come from the private sector, offering it a “sizable commercial opportunity” in return.