Banks, Government and GFI partner to scale financial products for green home upgrades

Stock image. Image: Green Finance Institute

The new Green Home Finance Strategic Partnership will be co-chaired by GFI CEO Dr Rhian-Mari Thomas and the Minister for Energy Consumers, Martin McCluskey.

It also includes representatives from finance firms like Barclays, HSBC, Lloyds Banking Group, Nationwide and NatWest.

Additionally represented in the Partnership are industry bodies including Citizens’ Advice, Energy Saving Trust, Energy UK, Nesta, UK Finance, the UK Green Building Council and the Finance and Leasing Association.

The Partnership’s overarching aim is to develop a mass market for green home finance solutions this decade. These will include loans and mortgage products which support homeowners, landlords or tenants to improve the energy efficiency of their properties.

Finance products facilitating the switch to low-carbon heating, or the installation of home solar or battery systems, will also be supported.

2024 research from Barclays found that seven in ten Brits are keen to improve the energy efficiency of their homes, but it was found that many struggle to afford upgrades.

The UK Government’s recently-published Warm Homes Plan includes a ‘universal offer’ of low-cost loans to cover domestic solar installations, but limits direct government support for insulation to low-income households.

Dr Mari-Thomas of the GFI said every party involved in the new Partnership has a shared mission: “scaling green home finance to make upgrades accessible for five million homes, creating warmer, healthier, and more affordable living across the UK.”

A climate imperative

The UK has some of the least energy-efficient buildings in Europe.

The Climate Change Committee (CCC) has stated that around one-quarter of the emissions reductions which the UK is legally committed to delivering between now and 2037 should be driven by building decarbonisation.

It estimates that existing policies are insufficient, across all sectors, to deliver almost 40% of the decarbonisation needed in this period. Delivering the required roll-out of heat pumps and building energy efficiency improvements are classed as ‘significant risks’ after years of stop-start policymaking undermined investment and public support.

Per the CCC’s forecasts, £373bn is needed to decarbonise the UK’s built environment by 2050. It foresees at least 65% of this funding, and as much as 90%, coming from the private sector.

The Government hopes the new Partnership will enable the mobilisation of billions of pounds.

Barclays UK’s co-head of retail banking, Jatin Patel, said:  “Delivering on the ambitions of the Warm Homes Plan will require collaboration across industry, from lenders like us through to energy providers, civil society and government. I’m therefore pleased to be joining this partnership, which creates the cross-industry network we need to make warmer, more energy-efficient homes both affordable and practical.”

Related article: From hydrogen to heat pumps – eight questions which experts still have about the Warm Homes Plan