Chancellor unveils £3.4 Billion plan to boost energy efficiency in homes

The Chancellor has announced that a staggering £3.4 billion will be spent over the next three years on heat decarbonisation and household energy efficiency.

The money will support the Warm Homes Grant Scheme, which will offer landlords up to £30,000 to boost energy efficiency in their first rental property and up to £15,000 for each additional property.

Ed Miliband has previously said all private rented sector properties must meet EPC C targets by 2030.

Rolling out heat pumps

In the Budget, Chancellor Rachel Reeves announced the Warm Homes Plan aims to upgrade five million houses.

The £3.4 billion also includes £1.8 billion to support fuel poverty schemes.

Budget documents said: “The Warm Homes Plan will transform homes across the country by making them cleaner and cheaper to run, from installing new insulation to rolling out solar and heat pumps.

“As the first step towards the Warm Homes Plan, the settlement provides over £1 billion next year, and to provide supply chain certainty now, a guarantee of investment of an initial £3.4 billion towards heat decarbonisation and household energy efficiency between 2025-26 and 2027-28.”

Landlords with properties in eligible postcodes will be given grant

A Department for Energy Security and Net Zero spokesperson told Property118: “The plan will offer grants and low interest loans to support investment in insulation, low carbon heating and other home improvements.”

For landlords, the Warm Homes Grant will provide £15,000 per eligible home for energy performance improvements, plus an additional £15,000 to install low-carbon heating, such as heat pumps.

However, the funding is capped at a maximum of £15,000 per home for energy performance upgrades and £15,000 for low-carbon heating.

Only landlords with properties in eligible postcodes, whose tenants are benefit claimants or low-income households, will be eligible for the grants.

Protect tenants from eviction

In a video, on X, formerly Twitter, chief executive of Generation Rent, Ben Twomey says: “The action taken on the Warm Homes Plan will help reduce bills and fuel poverty for people.

“This is good news, but we really need the government to protect tenants from evictions or rent hikes that might come from these energy-efficiency upgrades.”

The Labour government has also pledged to boost funding for the Boiler Upgrade Scheme in response to high demand.

The initiative offers grants of up to £7,500 to help replace outdated boilers with modern, eco-friendly heat pumps.