Countdown to net zero

The Government has a target for the UK to be net zero by 2050 and there are a whole host of initiatives underway to try to achieve this.

One of the things Liz Truss did in her short time as Prime Minister was to commission a Net Zero Review. This was chaired by Chris Skidmore MP, who has recently published Mission Zero, a report which makes 129 recommendations towards reaching this net zero target.

The recommendations are wide ranging covering areas including the role that business can play, making better use of infrastructure and delivering more energy efficient homes.

Cleaner, cheaper, greener homes

One of the Government’s aims is to deliver “cleaner, cheaper, greener homes”. The report states that the cheapest energy is the energy we don’t use, so by improving insulation and heating sources we will have warmer homes and lower bills.

In order to help achieve this, the Future Homes Standard is being introduced in 2025. This is a set of proposed building regulations that aim to reduce carbon emissions from new homes by 75-80% compared to current levels.

The proposed legislation is that no new homes will be built with a gas boiler from 2025 and all homes sold must have an Energy Performance Certificate (EPC) rating of at least C by 2033. For rental properties the dates are even earlier – 2025 for new tenancies and 2028 for all tenancies.

We carried out some research last August which found that 79% of landlords surveyed knew about the EPC changes, up from 70% at the start of that year. So awareness of these proposed EPC rule changes are getting through to landlords but one in five still don’t know about them.

Of those that do just over a quarter of landlords (27%) in our survey want to upgrade property as soon as possible. The majority (59%) would prefer to wait until nearer 2025 but 14% said they don’t intend to make any changes.

Replace EPC with NZPC

Since 2007 the energy efficiency of homes has been measured with an EPC via a banding system from A to G. The Mission Zero report is calling for EPCs to be reformed, as they do not work for net zero, and replaced with a Net Zero Performance Certificate (NZPC).

The current EPC does include suggestions as to what could be done to improve the energy efficiency of a home and what the potential new rating could be. But much more can be done to support people in retrofitting their homes. The Home Builders Federation has also recently published a report called Watt a Save, which stated that only 4% of older homes achieve an EPC rating of A or B, so there is a long way to go. By contrast 85% of new homes are A or B rated.

Supporting clients

So what has all this got to do with intermediaries?

Mortgage advisers are in a unique position where they can offer guidance beyond just finding a mortgage for their client. To help intermediaries, the Green Finance Institute (GFI) has launched the Broker’s Handbook, a guide to educate and inform about different green home retrofit solutions and technologies to help accelerate the decarbonisation of the UK’s homes.

The handbook provides a practical guide for brokers to understand opportunities in the mortgage sector through improving home energy efficiency. The GFI says it includes all the core information that brokers need to know to support customers on their net zero journey. There could be more to the advice role than just providing a mortgage, extra knowledge and useful information passed onto clients builds trust and leads to recommendations.

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