What will it take to make householders heed the retrofit message?
Just how persuadable are you? Do party political broadcasts make you rush to the polling booth? Do public campaign health campaigns have you testing your temperature, and did the Brexit campaign videos make you want to leave or remain?
When it comes to energy saving changes at home, Barclays believes there’s more to be done to encourage property owners to think green.
The lender is calling for campaigns like the ones which raised public awareness of the UK’s energy transition over half a century ago. It believes that a similar approach needs to be adopted to bring homeowners on board with decarbonisation measures.
Barclays points to a government target of an 81% reduction in carbon emissions compared with 1990 levels by 2035. Homes account for 15% of the UK’s carbon emissions.
Awareness is growing, it acknowledges, but its own research suggests that consumers find the topic of retrofitting their homes complex. While 70% of homeowners surveyed would like their home to be more energy efficient, more than one-in-three (35%) are dissuaded from making the improvements because they don’t understand which options are right for their property.
Barclays is calling on the government and the mortgage industry to work collaboratively to really press home the message to the public.
“More needs to be done to build awareness and understanding that ultimately leads to action,” Mark Arnold (pictured), its head of mortgages and savings, told Mortgage Introducer. “What is striking about the energy transition that took place in the 1960s and 1970s was the significant public relations effort to build consumer awareness and confidence even though this was an enforced change. Contrast this with today’s challenge where homeowners have to make their own decisions about the necessary improvements for their homes, there is a much stronger case for a concerted and consistent effort to increase homeowner engagement.”
Read more: Equity Release Council issues guide for retrofit lifetime mortgages
What part can government incentives play?
Government-backed incentives have an important role to play in stimulating the early adoption of high cost retrofit measures and low carbon heating systems, as well as building homeowner confidence in novel technologies, considers Arnold.
“They can increase investment into the sector and spur growth in supply chains, all of which are necessary for markets to scale effectively,” he said. “Certainty and consistency is key for driving and maintaining confidence. Targeted incentives for homeowners who are purchasing properties with lower energy efficiency ratings through a mechanism, such as a Stamp Duty rebate, can support homeowners who might have to make bigger investments to improve their properties and help maintain confidence in the housing market.”
Arnold believes the mortgage industry has a key role to play in raising awareness.
“The mortgage sector has a long-established track record of supporting homebuyers and homeowners with advice and guidance when making significant financial decisions about property investment,” he said. “The scale of the challenge before us – the transition to low carbon heating systems and improving the energy efficiency of the UK’s aging housing stock – will require significant support from the sector; from innovation in financial products, to ensuring that homebuyers and homeowners get the right advice and guidance to support their decision making.”
Collaboration is vital, in Arnold’s view; pulling together to support homebuyers and homeowners through the transition.
“The sector will play a role in helping customers to make changes to their homes, but it cannot address all the barriers to retrofitting without a systems-wide approach, including help from government and wider industries,” he said. “That means every part of the value chain playing its part; sharing insights and working together to ensure we maintain confidence in the housing market, that our customers continue to access high quality advice and guidance in their financial decision making, and that no one gets left behind as these new markets start to scale.”
Barclays welcomes the government’s emissions targets for 2035, including EPC ratings of A to C for rental properties, Arnold shared, and will work together with ministers to ensures this happens.
