Housing minister suggests £10,000 retrofit bill for homebuyers is ‘minimal’

A housing minister has said the cost of retrofitting new homes to hit net zero targets will be “minimal” for owners – despite estimates that bills could total more than £10,000.

Christopher Pincher’s comments were published in a new report from the Business, Energy and Industrial Strategy Committee (BEISC), which highlights significant policy gaps in the government’s plans to decarbonise UK housing stock.

The report found the government is not making “anywhere near enough progress” on energy efficiency measures or installation of low-carbon heating in homes, and warned that the UK is on track to miss its net zero target as a result. 

One area of concern illustrated by the BEISC was the number of homes that will have to be retrofitted in the future due to slow progress on decarbonisation policy. 

By 2025, the government has planned to implement a “Future Homes Standard” which means all new homes will be fitted with low carbon heating and have high levels of energy efficiency. 

In its report, the BEISC pointed out this means around one million homes will be built up to 2025 without these measures, meaning they’ll require retrofitting at the homeowner’s expense. 

Pincher initially declined to attend an oral evidence session to discuss decarbonisation before the committee, saying his department had a “limited” role in the transition to green household heating systems.

When later questioned on the matter of decarbonisation costs for homeowners, his response was that bills would be “less than you might suppose” due to prices of kit like heat pumps falling by the time retrofit is required. 

The BEISC responded in its report by saying that “the minister’s assessment that costs will be ‘minimal’ is unrealistic and based on assumptions rather than costed proposals”.

Though it’s difficult to project a uniform cost for retrofitting a home, Zoe Guijaro, senior policy researcher at Citizens Advice, told the committee that transitioning to a low-carbon heating system could cost “upwards of £20,000”. 

The Climate Change Committee, (CCC) meanwhile, projected an average cost of around £10,000. 

This is because of additional costs associated with installing a low-carbon heating system, such as fitting new radiators or acquiring new plumbing.

Even accounting for the government’s Heat Pump Scheme, which offers £5,000 grants for pump installation, this could leave homeowners footing bills of up to £15,000 to decarbonise their property. 

The BEISC report called these costs a “major challenge” to decarbonisation plans, saying it is unrealistic to ask households to “pay upwards of an extra £10,000 to replace their existing home heating, which is working perfectly adequately”. 

New homes aren’t the only housing stock which will require retrofitting over the coming years, with the CCC projecting that 29 million existing homes will need upgrading to low-carbon heating systems by 2050 at a cost of £9bn per year.

The BEISC warned the UK is not currently on track to meet this goal, with “ineffective historic heating policy and the absence of a clear, strategic policy direction for low carbon heating” creating confusion among consumers and investors as well as slowing progress on retrofitting.

The committee has made a series of recommendations to the government, including bringing forward the Future Homes Policy to 2023 and producing a “heat technology roadmap” to outline how low-carbon heating technology can be scaled up in the coming years.

Darren Jones, Chair of the BEISC said: “Replacing gas boilers is a huge task and we are not making anywhere near enough progress. As it stands, we will miss our net zero target. 

“The government must act urgently to help speed up delivery and support bill payers and workers who will be affected by the change.”

A government spokesperson said:   

“Our landmark Heat and Buildings Strategy provides a clear and comprehensive plan for cutting emissions from the UK’s homes, with plans to incentivise people to install low-carbon heating systems in a simple, fair and cheap way, including £5,000 grants for heat pumps.

“With industry we are aiming for big cost reductions of between a quarter and a half by 2025 as the heat pump market expands and technology develops.

“In total, we’re investing £6.6 billion this parliament to decarbonise our buildings, saving people money on their bills and slashing pollution in the process.”