Last month, the Chancellor unveiled a series of measures designed to support the UK economy through the coronavirus crisis. One of the most eye-catching announcements in Rishi Sunak’s summer statement was a new initiative which will set aside £2 billion to improve the energy efficiency of up to 600,000 British homes.
This scheme is a part of a greater plan to cut carbon emissions to net-zero by 2050. Improving the energy efficiency of homes will be a big step towards this goal. Research shows that heating buildings account for a fifth of UK greenhouse gas emissions.
At the same time, the Chancellor stated that it would also “kick-start our economy” by creating thousands of new jobs as well as helping households to cut their energy bills by hundreds of pounds a year.
All this seems too good to be true. But what does the scheme cover? How will it work? And how much could you save on home improvements? Read on for answers to these questions and more.
Homeowners could save hundreds through energy efficiency
Figures show that, in 2019, the average household in a three-bedroom house spent £1,163 per year on utilities.
If you’re one of the 8.7 million people who have worked from home this year, your gas and electric usage has likely gone up.
Even if you have gone out to work, you’ve probably still been at home longer and will see your bills rise. Some predictions state that utility bills may be higher by more than £400 this year.
However, with a few upgrades, the cost of energy can be reduced. Measures such as attic and cavity insulation, along with glazed windows, can significantly lower the cost of heating and save money.
The Chancellor confirmed in his July speech that the new grant will provide up to £5,000 per household to improve energy efficiency. Of this amount, you will only have to pay around one-third of the costs as the scheme will cover the remaining two-thirds.
For example, if a homeowner installed wall and floor insulation costing £4,000, they would only pay £1,320 with the government contributing the remaining £2,680.
Landlords can also apply for this grant to improve the energy efficiency of their properties. There are currently over four million Buy to Let properties in the UK which could benefit from this scheme.
A property cannot normally be leased if it has an energy performance rating of F or G so this grant will provide landlords with the funds to improve the ratings of their properties. Tenants will also benefit from the lowered cost of energy bills.
Full details about the grant will be released on the government’s website in September 2020. All homeowners and landlords in England will likely be eligible to apply.
The scheme covers a variety of improvements such as wall and loft insulation
The improvements that you can apply for vary from home to home, but some typical examples could include:
- Wall, cavity, and loft insulation
- Double or triple glazing of windows
- Energy efficient doors
- Low-energy lighting
It is even possible that methods of renewable energy generation such as solar panels could be included in the scheme if an assessor thinks it would be a viable improvement to make. The government will announce full details of the scheme and what improvements it will cover in September.
The grant is welcome news for homeowners, as research shows that UK homes are some of the least energy efficient in Europe. Almost 40% of the UK houses were built before 1946 and lack modern energy-saving measures.
As a homeowner, you will be able to see what potential improvements could be made to your home, as well as a list of accredited providers. Once these providers have given you a quote for the cost of the improvements, you send the quote for approval and the government will then send you the voucher.
Paying back the grant if you move home
If you move to a new house, you will not have to pay back the costs of the improvements for your existing property after you have left. Only the person currently living at the property will have to pay.
When you are buying a property, which has had improvements already made to it using funding from this grant, they will be listed on the property’s Energy Performance Certificate. This certificate will tell you what those improvements were and how much you will need to pay.
Get in touch
If you’re looking for mortgage advice, we can help. Email enquire@london-money.co.uk or call us at (0207) 808 4120 to find out more.