Simply 41% of properties in England are rated EPC ‘C’ or increased
This might whole as much as £31bn of personal funding this decade.
These stark findings are drawn from new research published today (20 March) by the UK Sustainable Investment and Finance Association (UKSIF) – a collaborative initiative convening greater than 300 monetary establishments collectively managing nearly £20trn of belongings worldwide.
UKSIF surveyed 100 decision-makers at companies with investments within the UK housing sector, together with representatives of HSBC and Federated Hermes. The survey confirmed that delays, weakenings and U-turns referring to inexperienced coverage from the nationwide Authorities has hampered funding into low-carbon buildings and prompted many worldwide buyers to look elsewhere.
Virtually two-thirds (63%) of these polled are primed to cut back funding within the UK and re-allocate it overseas, in markets that are extra engaging for low-carbon new buildings and/or retrofitting present properties.
Two in 5 mentioned that accessing personal capital for low-carbon tasks stays difficult within the UK, significantly for retrofitting.
The survey discovered {that a} significantly dangerous coverage change was Prime Minister Rishi Sunak’s determination, taken final September, to scrap forthcoming necessities for the landlords of personal rented properties to enhance their vitality effectivity. The necessities would have entailed landlords needing to improve properties to attain an EPC ‘C’ score by 2028.
UKSIF’s analysis discovered that re-instating this dedication, however delaying the deadline to 2035, may placate landlord considerations and permit ample time for supply whereas nonetheless sending the proper messages to buyers. The mandate must also stipulate that landlords add vitality consumption information for public entry, at the least each three years.
UKSIF’s chief govt James Alexander mentioned: “Traders are in determined want of readability from the federal government on sustainability coverage, and solely then can alternatives be unlocked for the UK housing sector, with advantages realised for customers, the atmosphere and the broader economic system.
“Our analysis reveals that there’s big demand from actual property firms and buyers alike to put money into the UK, however coverage reform and authorities measures to shut the talents hole are essential if the UK is to keep away from falling behind different nations within the race for capital.“
Inexperienced mortgages
The survey additionally discovered that the majority buyers imagine the Authorities will not be doing sufficient to make owner-occupied properties extra sustainable.
9 in ten mentioned they wish to see extra inexperienced mortgage merchandise on the British market. It was acknowledged {that a} standardized definition for these mortgages, from the Monetary Conduct Authority, can be an important assist in rising the market.
The UK Authorities is notably growing a Inexperienced Finance Taxonomy at current. This can cement which investments might be badged as ‘green’ and which can not. The launch of the Taxonomy has faced numerous delays due to challenges such as the two consecutive changes in Prime Minister in 2022however is due this yr.
The UKSIF survey additionally discovered that the Authorities may help the inexperienced mortgage market by offering an insurance coverage programme, thus decreasing premiums. Such an initiative is already in place within the US.
Accounting for 17% of UK emissions in 2022, the constructed atmosphere is second solely to floor transport in terms of high-emitting sectors.
