New energy department must deliver green homes ‘clarity’: Imla – Mortgage Strategy

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The new Energy Security and Net Zero department must lead to more “efficient decision-making” across government in the drive for green homes, the Intermediary Mortgage Lenders Association says. 

The department is part of a shakeup of how government is run by Prime Minister Rishi Sunak and sees the Department for Business, Energy and Industrial Strategy broken up as part of the reorganisation.  

The government says the new body is “tasked with securing our long-term energy supply, bringing down bills and halving inflation”.  

Grant Shapps will head the new energy department, moving from his role as business secretary.  

Imla executive director Kate Davies says: “The Prime Minister’s decision to split up the business department and restore a standalone energy department brings hope for more efficient decision making on energy policy, and in particular energy efficiency requirements for homes.   

“However, action to match this aspiration must follow if real change is to take place.” 

The appointment of the new energy secretary follows last month’s government-commissioned independent review of the administration’s long-standing goal to cut the UK’s greenhouse gas emissions, compared to 1990 levels, to net zero by 2050.  

The wide-ranging ‘Mission Zero’ review by former energy minister Chris Skidmore underlines that housing is a vital part of this drive, as the country’s housing stock accounts for around 14% of the country’s greenhouse gas emissions.  

This is the country’s second-largest source of emissions after surface transport, which accounted for 23% of emissions last year, says parliament’s latest Climate Change Committee report released last June.   

Among a range of initiatives, Skidmore’s review calls for “at least” 600,000 heat pumps to be installed in homes a year by 2028 and 1.9 million a year by 2033.   

In 2019, 27,000 heat pumps were installed across the country, according to the Energy Saving Trust.  

Landlords also face government rules that mean they will have to meet a minimum energy performance certificate standard of C for all newly-rented properties in England and Wales by April 2025. The measure would apply to existing tenancies from 2028.     

The Committee on Climate Change’s latest report estimates that £55bn of investment in home energy efficiency will be needed by 2050.  

Imla’s Davies adds: “The UK housing market has been waiting for clarity on energy performance certificate rule changes for months now, despite the first proposed deadline – the 2025 cut-off for all rented properties to become energy performance certificate band C – looming nearer every day.  

“Landlords in particular have been left with a significant amount of work to do and little guidance on how, when or whom they should approach to ensure their properties are compliant with whatever energy performance certificate regulations are introduced.   

“We hope that a new, streamlined department will help provide some much-needed clarity on the requirements for landlords, lenders, brokers and housebuilders alike.  

“It will also be very important that the new department does not operate in a vacuum – but works closely with other departments, agencies and stakeholders in order to develop a joined-up, long-term strategy.”  

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