What do the recent net zero policy changes mean for social housing?

Over the past month we have seen a number of net zero announcements from the government that will have an impact on the social housing sector’s work to decarbonise social homes across the country.

In a speech back in September, the Prime Minister set out his new approach to net zero, which included changes to a number of housing related net zero policies. While, more recently at the Conservative Party Conference, Energy Security and Net Zero Secretary Claire Coutinho announced additional funding for the Social Housing Decarbonisation Fund (SHDF). 

In light of these recent announcements, it is useful to break down exactly what has been announced and what it means for social housing. While the Prime Minister rowed back on a number of the government’s net zero policies, it is important to note that there was no specific mention of social housing in his speech. The additional SHDF ‘top up’ funding is a good indication that the sector’s ambition to decarbonise our social homes is well regarded by the government, and they will continue to support our sector with this work through programmes like the Social Housing Decarbonisation Fund. This means that unless we hear otherwise, the sector’s plans for decarbonisation shouldn’t change as a result of the recent policy changes.  

So what did the Prime Minister announce in on net zero back in September ? Firstly, Rishi Sunak pledged to ‘never’ increase energy efficiency standards for the private rented sector. This means private renters living in energy inefficient homes are likely to end up with higher energy bills and it will also impact on the government’s ability to reach their fuel poverty targets. However, this will not directly impact the social rented sector and we are still expecting a government consultation on the introduction of minimum energy efficiency standards (MEES) in the sector. Many housing associations are already working towards an EPC rating of C or better in their homes, but this could set a statutory requirement for social landlords to do so.

The Prime Minister also announced some changes to the government’s heating policy. Back in 2021, the government consulted on phasing out the installation of fossil fuel heating in homes off the gas grid by 2026. The government is yet to respond to the consultation, but the Prime Minister has now announced that this phase out will be pushed back to 2035. Additionally, the ban on the sale of new gas boilers from 2035 remains in place, however, there will now be an exemption for homes that are ‘not suitable for heat pumps’. We are yet to see the details of this so we can’t say for certain how many homes this exemption will apply to.

The changes to heating policy will apply to the social rented sector and these changes could add to uncertainty within the retrofit market. However, backstop dates remain in place both for phasing out fossil fuel heating installation in off gas grid homes and for the phase out of new gas boilers. Furthermore, the government remains committed to the transition to clean heat and will consult next year on potential low carbon heating options for off gas grid homes that are not suitable for heat pumps.

Other government policies on heating and the decarbonisation of homes remain unchanged and the commitment to deploy 600,000 heat pumps every year by 2028 is still in place, suggesting that the government still views heat pumps as the main solution for decarbonisation. The Future Homes Standard is also still set to be introduced in England from 2025 and the changes to heat network regulation are continuing as planned.

While the Prime Minister had rowed back on some of the government’s net zero policies, there was a clear message at the Conservative Party Conference for the social housing sector to continue to decarbonise social homes. The Secretary of State announced a £80m ‘top up’ for a Social Housing Decarbonisation Fund (Wave 2.2). This additional funding is available to social housing providers who did not receive funding through Wave 2.1 of the fund. Wave 2.2 will open for applications in mid-November and you can find out more about requirements and indicative timelines on GOV.UK. The additional funding is a good indication that the government views housing associations as trusted partners to deliver on the decarbonisation agenda. At a time when there is a growing degree of uncertainty around the future of the net zero agenda, this funding confirms the government’s commitment to working with the social housing sector to decarbonise the country’s social homes.

The announcement comes off the back of our campaign day last month, when we called on the government to release the full amount remaining of the Social Housing Decarbonisation Fund. Although Wave 2.2 is only a fraction of this amount, we are continuing to speak with the government ahead of this year’s Autumn Statement with the aim of getting Wave 3 released.

So, what does this mean for social housing? Well, our sector is already leading the way on the decarbonisation of homes, thanks to the hard work of housing associations across England. This is recognised by the government, and we should continue to work toward our goals. The sector has made great progress over the past couple of years, making use of the first two waves of the Social Housing Decarbonisation Fund to undertake ambitious retrofit projects. Now is the time for us to build on this work to make our social homes more energy efficient, bringing enormous benefits both for the environment and for our residents.