High costs and limited awareness dampening uptake of low-carbon technologies
The UK will miss its climate goals without a clear and coordinated strategy to increase demand for green home upgrades, a new report from UK Finance has warned.
The report, Unlocking Demand for Green Home Finance, argues that current adoption rates for measures such as insulation, solar panels and heat pumps remain too low, despite the urgency of the country’s carbon reduction targets.
Drawing on consumer research conducted by YouGov, the report highlights the public’s hesitancy around heat pump technology — seen as a cornerstone of the UK’s decarbonisation plans. It notes that although the UK needs to install around 1.5 million heat pumps each year by 2035, current uptake falls well short of this. High upfront costs remain the main barrier for most households, while others are held back by uncertainty over long-term cost savings.
UK Finance, an industry body for financial services in the UK, contends that encouraging greener homes will require more than finance alone. The report calls for government-led action combining public education campaigns, industry coordination, and financial incentives. It sets out nine policy recommendations for inclusion in the government’s forthcoming Warm Homes Plan, including the creation of a national coordinating body, reforms to energy pricing, and the expansion of grants and retrofit training programmes.
“To meet our ambitious targets on greening the UK’s housing stock, we need to drive demand and convince the public of the benefits,” said Ian Bhullar, director of sustainability policy at UK Finance. “Lenders are committed to playing their part and through the government’s Warm Homes Plan, we have the opportunity to really make a difference.”
The report also calls for clear long-term guidance so homeowners, landlords and businesses can plan upgrades with confidence. It stresses that retrofitting must be made easier and more affordable to unlock the benefits of energy savings, job creation and increased energy security.
Propertymark, the professional body for property agents, also expressed support to the call, saying it “has always advocated for low-carbon heating systems that include heat pumps as a central component of achieving net zero.”
“It is clear that costs are a barrier for many people when it comes to switching to these low carbon alternative means to heat their homes,” said Toby Leek, president of NAEA Propertymark. “There are many government schemes out there, such as the Boiler Upgrade Scheme that gives households in England and Wales £7,500 towards replacing their old boiler system with a heat pump.
“At the same time, it is vital that the UK government and the devolved administrations avoid a one-size-fits-all approach towards energy efficiency, as for example, older properties are not always able to add heat pumps, something that Propertymark will continue to campaign for.”
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