Latest housing research: decarbonisation is an opportunity to transform relationships with residents

Challenging environment

The context for decarbonisation of the nation’s housing stock is well understood. Residential housing is estimated to account for 20% of the UK’s greenhouse gas emissions, with the majority of emissions being from household heating. Consequently, the decarbonisation of housing stock is a critical step in the journey towards net zero carbon emissions by 2050.

In England, social landlords are expending significant investment on decarbonisation, drawing on a mix of central government funding and private finance. The primary source of central government funding is the Warm Homes: Social Housing Fund, which has committed £1.29bn until 2027-28. Investment has primarily been focused on retrofitting loft and wall insulation, solar photovoltaic systems, and the installation of low-carbon heating systems.

The report looks in detail at the macro factors that have been creating a challenging installation environment, but also at the less well-known impact of customers refusing access for decarbonisation works.

Decarbonisation presents a big financing challenge for social landlords, and this is occurring at a time when there are several competing demands on landlords’ resources. Social landlords’ expenditure on maintenance and major repairs has increased in recent years, in large part due to investments in building safety, while landlords have also been affected by inflationary pressure. This has increased the cost of borrowing and placed several social landlords at risk of a loan covenant breach, most notably landlords whose earnings are insufficient to cover their interest payments once accounting for maintenance and major repairs expenditure.

The funding landscape for energy efficiency works is fragmented, with different schemes having contrasting criteria and specifications. This makes the whole process difficult to navigate.

Energy systems have also created challenges in scaling up retrofit in two respects: the price of electricity (the ratio of electricity to gas prices) is high in the UK relative to other European countries and grid capacity for the roll-out of heat pumps is constrained. The built environment also imposes trade-offs between decarbonisation and other objectives.

Social landlords have highlighted that prior planning is necessary to avoid compromising accessibility through fabric improvements, for example making passageways to back gardens inaccessible for wheelchair users when installing external wall insulation. And installations such as hot water cylinders or solid wall insulation can result in a reduction in storage space and floor space. Such trade-offs can contribute to customers refusing access for decarbonisation works.

Customers refusing works was a recurring theme across maintenance generally and retrofit projects in particular. The disruption of retrofit work, doubts about the benefits and a general lack of trust in the landlord means that refusals are a significant issue. This causes delays and increases the cost of decarbonisation programmes. However, all these concerns can be addressed, thus helping to strengthen landlords’ relationships with their customers. The report cites many areas of practice that have made a difference to the take-up of these projects:

● A more sustained, extensive and targeted resident engagement process is needed to support decarbonisation

● A segmented and tailored engagement strategy could improve acceptance rates by addressing specific vulnerabilities and concerns rather than relying on one-size-fits-all communication approaches

● Positive customer testimony to build trust in the process, and promoting peer-to-peer communication.

● Leveraging technology to tackle concerns that decarbonisation and heat pumps will result in higher energy bills

● Employing retrofit liaison officers to act as designated contacts during and following retrofit

● To ensure the benefits of retrofit are realised after the installation, and that customers remain satisfied, landlords should maintain long-term contact with residents

So, if landlords approach these challenges by viewing decarbonisation as an opportunity to transform their relationship to both their housing assets and their customers, they will make better and faster progress. But more importantly, they will be acting transparently and be engaged and accountable to their residents. This will help drive improvements and ensure regulatory and legislative requirements are not just met, but are harnessed to help move us towards net zero.

Richard Hyde, chair, Thinkhouse Editorial Panel