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How can social landlords help build the foundations for a low carbon housing sector?

Posted by Poppy Potter | 11 October 2016 | Viewpoint

Around a quarter of the UK’s current carbon emissions comes from our homes.  One of the biggest challenges we face is how to retrofit existing housing stock so that it is much more energy efficient. Social landlords are uniquely well-placed to lead the way to prove the case for energy efficiency and lay the foundations for broader action.

Although we are making good progress in cutting carbon emissions from some sectors, improving residential energy efficiency is proving to be a tough sell. Just look at the almost complete failure of the Green Deal. But better engagement with social landlords could be the key to unlocking some of the most significant barriers that are preventing progress.

Around a quarter of the UK’s current carbon emissions comes from our homes. These are primarily from direct use of fossil fuels – mostly natural gas – which are burned for heating, hot water and cooking, and as result of generating the electricity needed to meet domestic demand.

To meet our national ambitions on climate change, it goes without saying that we will have to build new homes to low carbon standards. But with all the current attention on the need for new housing, it is important to remember that the majority of the homes that will exist in 2050 have already been built.

One of the biggest challenges we face is figuring out how to retrofit the vast majority of our housing stock so that it is much more energy efficient. At the same time, we will also need to adapt homes to the likely effects of climate change over the coming decades, such as increased risks of flooding and higher summer temperatures.

In principle there are incredibly strong arguments for investing in energy efficiency. It can be a genuine win-win situation which reduces energy bills, cuts carbon emissions, and creates warmer, healthier places to live. It can help households that are in fuel poverty. It can support local employment for tradespeople and small businesses with the skills to deliver improvements. And it can help communities to become more resilient in the face of climate change.

However, there are also serious barriers to change happening in certain circumstances. For example, if a tenant is paying their own energy bill then private landlords are not properly incentivised to go beyond the legal minimum (an EPC of ‘E’ from 2018), as they get no immediate financial benefit from making improvements to the efficiency of a property.

Individual owner-occupiers can face a host of issues. They may not know what their opportunities are. They may not trust the promise of savings from new equipment, or the the quality of workmanship by installers. Or they simply might not want to clear a decade’s worth of junk out the loft so they can lay some insulation.

The good news is that social landlords are uniquely well-placed to lead the way in transforming housing. This can help to prove the case for energy efficiency and lay the foundations for broader action across the sector.

There are almost 5 million social rented homes in the UK, representing 18 percent of the total housing stock. Over half of these homes are owned by housing associations, with the remainder owned by local authorities. And both housing associations and local authorities are driven by a purpose beyond pure profit.

Tackling fuel poverty is often the main impetus for improving the energy efficiency. Unaffordable heating is a particular problem for social housing tenants, who are now more likely to have lower incomes than in the past, especially in comparison to owner-occupiers and private renters. Inefficient housing can also have impacts on households that go beyond the financial issues, as cold and damp homes can affect residents’ health and wellbeing, especially vulnerable individuals such as the elderly or disabled.

To combat this some social landlords have been pioneering innovative and collaborative ways to eliminate fuel poverty. One housing association partnered with the local health service to pilot a scheme where doctors can prescribe energy efficiency retrofits for residents that have health conditions exacerbated by damp or cold living conditions.  The costs of the improvement works are shared by the health service and housing association, as these can help both organisations to fulfil their social purpose.  Others are investigating the use of smart metering to identify likely incidents of residents suffering from fuel poverty in real time, which can help target and prioritise upgrade works.

And benefits go both ways. Lower energy bills for tenants can help to reduce the risk of rent arrears, helping to bolster cashflow for social landlords. Undertaking upgrade work also presents a good reason to review the condition of buildings, which can reveal opportunities to carry out preventative repairs or quality improvements along the way, avoiding costlier works in the future.

There is also a case for taking action to help residents to cope with the impacts of a changing climate, such as increased flooding. Only half of social housing tenants in the UK have insurance for their home contents, compared to 93% of owner occupiers. So the case for doing everything possible to protect premises from flood damage is particularly strong.

However, unfortunately there are numerous examples of unintended and unwanted consequences from improvements in the housing sector. For example, there are some highly energy efficient new build homes that are overheating in summer, in some cases to the extent where they are completely unliveable without mechanical cooling. Or there are homes in high rainfall areas where insulation injected into cavity walls has not been applied properly, which has allowed rain to soak directly indoors and create damp problems, meaning the buildings actually become more expensive to heat.

Social landlords are very well positioned to test out new approaches to addressing housing problems. They have experience in managing large volumes of housing stock. They have the skills to handle major maintenance and refurbishment programmes. And they are concerned about quality, as they typically have to meet tougher building standards than the private sector, and retain ongoing responsibility for managing properties.

Because of their scale they are also uniquely placed to track what works and what doesn’t. They can make use of large samples of actual energy use data from smart meters. And they are often actively engaged with tenants via formal residents’ associations. So feedback on the ‘reality of retrofit’ can directly filter into future decision-making, hopefully leading to more satisfactory outcomes for everyone involved.

There is still a long way to go in improving domestic energy efficiency in the UK. The residential property sector moves slowly – new ideas and practices take a long time to filter through and become commonplace. If we get it right we can have higher quality homes, wasting less energy, that are better for both people and the planet.

However, our current progress suggests that we haven’t got anywhere near the right answer yet. We will all benefit if social landlords take advantage of their unique sustainability leaderhip opportunity, helping to demonstrate what works and what doesn’t, helping us all to lay strong foundations for a sustainable, low carbon future.

See more information about the Carbon Trust’s low carbon housing and retrofit services.

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