The social enterprise offering loans to people who can’t afford to make their homes greener

Britain has the leakiest homes in Europe and that means higher energy bills and a bigger carbon footprint – but not everyone can afford to carry out the retrofit work to make their home greener. Social enterprise Lendology works with councils in the west and south-west of England to lend cash to people who want to insulate private sector homes, install renewable energy measures like solar panels or carry out repairs.

The low-cost lender is now calling for councils to speed up its efforts to make homes more energy efficient after it quizzed 50 local authorities and found fewer than half have targets to tackle emissions from private housing.

Emma Lower, chief executive of social enterprise Lendology, said: “The UK has an unfortunate twin challenge; we have some of the leakiest houses in Europe, and an ageing population increasingly needing warmer homes to protect their health and wellbeing. We also know that councils’ budgets are very stretched, and our survey reiterates that funding is the biggest barrier to implementing retrofitting strategies. 

“This means that councils cannot rely on a grant-based offer to their residents. As well as often being difficult for residents to navigate, the level of grants available is simply inadequate on their own to tackle the scale of this problem.” 

The UK is in a race against time to meet its international commitment to reach net zero by 2050 in a bid to limit global temperature rises to 1.5C.

But housing is one of the country’s biggest polluters, accounting for 21 per cent of all UK carbon emissions.

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Slashing emissions by making homes energy efficient will have a big say on whether the UK reaches its net-zero goal, but progress so far has been slow.

The Big Issue reported earlier this year that efforts to retrofit social homes were behind schedule. The government has since announced the second wave of the Social Housing Decarbonisation Fund which pledges £778 million in funding to upgrade more than 105,000 homes by 2025.

The Westminster government also revealed the rebranded Great British Insulation Scheme in last month’s ‘Green Day’ announcements. The scheme will upgrade 300,000 of the country’s least energy efficient homes with 80 per cent of households in council tax bands A to D qualifying for funding.

Last week Labour said it would insulate all 19 million homes below Energy Performance Certificate rating B or C if it comes into power, saving households an estimated £500 on energy bills each year.

Meanwhile, private landlords will have to ensure all newly rented properties are up to at least EPC C by 2025 with all properties on the rental market required to hit that mark by 2028. 

Overall, all residential properties must be at EPC C by 2035. That’s no small task: there are 27 million residential properties in the UK.

That means the UK needs to retrofit one million homes each year between now and 2050 in order to achieve net zero, according to the UK Green Building Council.

But of the councils quizzed by Lendology, a fifth had no plans in place to support the retrofit of private housing.

Janine Michael, deputy chief executive at the Centre for Sustainable Energy said; “There’s lots of evidence that confirms living in a cold home is bad for your health. Improving housing so it leaks less heat is vital, not only to save money on energy bills and improve the condition of homes and health, but it’s vital for the transition to the low carbon heating we need for the future.

“We need the right incentives for landlords, strong legislation, support for households to understand their options and investment in growing the retrofit supply chain to actually get the work done.”

Somerset-based social enterprise Lendology is now hoping to offer low-cost loans to people who cannot get credit elsewhere to allow private sector households to join the retrofit race.

The local authority loans are recycled when they are repaid with the idea being that the public funds go back into the council coffers to be lent out again to another homeowner. 

The loans, typically offered at an interest rate of 4.2 per cent APR, are available to households on low incomes. Lendology’s customers earned on average £20,180 per year as a household in 2021/22 with 46 per cent of those who lent cash also receiving benefits. 

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Meanwhile 29 per cent of the social enterprise’s customers either did not know their credit rating, or described their credit rating as ‘fair’, ‘poor’ or ‘very poor’. 

A spokesperson for one of the local authorities working with Lendology, South Gloucestershire Council, said the council had used the lender to help residents in fuel poverty.

“South Gloucestershire Council has worked with Lendology for over 18 years to provide low interest flexible loans to residents to make their properties warmer, safer, healthier, and more suitable for their needs,” said the council spokesperson.

“We support loans for all aspects of home energy improvements including heating, insulation, and the installation of climate friendly renewable technologies.”

To find affordable credit or a credit union, head to findyourcreditunion.co.uk or findingfinance.org.uk.

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