How targeted funding and upgrades have made substantial improvements in energy efficiency, fuel poverty reduction, and resident wellbeing

The government’s recently released Warm Homes Plan and announcements on Minimum Energy Efficiency Standards (MEES) for the social rented sector represent a significant step towards reducing bills for households and decarbonising homes.   

Housing associations are committed to reducing carbon emissions, with 72.5% of housing association homes now rated Energy Performance Certificate (EPC) C or above, surpassing all other tenures. Together with other targeted interventions, this has meant that housing associations have nearly halved the number of households in fuel poverty in the last 10 years, and have the lowest proportion of households in fuel poverty of all the rented tenures (11.6%).   

This is in no small part because of the Warm Homes: Social Housing Fund (WH:SHF). 

Since the WH:SHF was established in 2021, housing associations have brought nearly 51,000 homes up to EPC C, with current Wave 3 funding enabling up to 170,000 additional homes to be upgraded by housing associations and local authorities. These upgrades have made significant improvements to the lives of residents, reducing household energy bills by nearly £200 per year on average, and resulting in fewer reports of damp and mould.  With the social rented sector more likely than other tenures to house people at risk of ill health from fuel poverty, this targeted intervention has helped to support the needs of those most vulnerable and address the ill-effects of fuel poverty.  The

Warm Homes Plan  

We welcome the £5bn allocated to low income households through the Warm Homes Plan, in particular the £4.4bn of grant funding set aside for a new low income grant scheme – including a £295m ‘top up’ to Wave 3 of the WH:SHF. This funding will ensure that the good work done through the WH:SHF and the Warm Homes: Local Grant schemes can continue.   

The plan confirms the intention to replace these two schemes with a singular low income grant scheme shifting towards area-based delivery from 2027. While the design of the fund has not been settled, our initial conversations with the Department for Energy Security and Net Zero (DESNZ) have indicated that they intend to devolve the fund to local authorities.   

If designed right, a place-based approach can make it easier to deliver retrofits through utilising economies of scale and increasing the flexibility of the funding. However, it is crucial that housing associations are involved in the design of this fund to ensure that they can continue their vital work to reduce household bills and decarbonise homes.   

We are in regular engagement with DESNZ officials on the future combined fund. Housing associations need clarity as soon as possible on how they will be able to access this funding to retrofit their homes and move towards compliance with Minimum Energy Efficiency Standards (MEES). Building on the improvements made to the WH:SHF, we also want to make sure that this funding is easily accessible for our members, with longer delivery windows, a less competitive bidding process and a lower administrative burden, especially for medium-sized and smaller housing associations. We will be undertaking further member engagement as this work progresses; if you have views on how this fund could best work for your organisation, please get in touch.  

The Warm Homes Plan also announced £5bn for a new Warm Homes Fund, to help households meet the upfront costs of home upgrades. This is separate to the funding for low income households and will be able to be accessed by a broader range of households. The government will work with the finance sector to develop a range of products tailored to different households and technologies. The Warm Homes Plan identified social housing organisations as one area that could utilise these products, acknowledging that the upfront capital cost can be a major barrier to installing energy efficient and low carbon technologies.   

DESNZ intend to open a call for evidence on the best use of this funding in spring 2026. Leading up to this, we will continue engagement with DESNZ officials to understand what they would like to see from housing associations through this process, and how we can best support our members to engage with this.  

Heat Networks  

Additional announcements within the Warm Homes Plan included £15m per year to 2029/2030 for the Heat Network Efficiency Scheme and £195m per year to 2029/2030 for the Green Heat Network Fund. While this funding is welcome, we are concerned that the additional funding provided to the Heat Network Efficiency Scheme (HNES) is not sufficient to enable housing associations to comply with the new heat networks regulatory framework, including the new technical standards currently under consultation. We are coordinating a response to this consultation; if you would like to contribute to this response, please get in touch below.   

Finally, the Warm Homes Plan acknowledges the need for social housing to be resilient to a changing climate. The plan sets out a number of measures that the government intend to take to tackle overheating in low-income households and commit to exploring stronger objectives for climate adaptation, to support a more ambitious and impactful fourth National Adaptation Programme (NAP). We will be engaging with the Ministry of Housing, Communities, and Local Government (MHCLG) and DESNZ to support the development of this programme and to seek further clarification on the Warm Homes Plan’s climate adaptation announcements. This engagement will feed into our new climate resilience work strand. To find out more, please get in touch with Charlotte Rogers. 

Watch a recording of our webinar on the Warm Homes Plan.

Minimum Energy Efficiency Standards  

We are pleased to see confirmation of the requirements under the MEES for social housing. The final announcement is a significant improvement from initial government proposals, requiring social housing providers to meet EPC C on one metric by 2030, and a second metric by 2039. This is a sensible approach that considers the competing demands on housing associations, the likely supply chain maturity, and the impact on tenants. The inclusion of a transitionary period until 2030, and a £10,000 spend cap, will enable housing associations to continue to upgrade their homes, alongside ongoing work on the quality of existing homes and building new social housing.   

The sector awaits the full government response to MEES. We expect this will provide more information on how MEES will work in practice, including details on the transitionary period, spend cap, and compliance. The government have also committed to developing further guidance on the updated Decent Homes Standard, similar to the guidance provided for Awaab’s Law, which will include further guidance on MEES. We will continue regular engagement with the responsible MHCLG officials and will work to influence the guidance so that it provides further clarity in areas where housing associations need additional detail.