Transforming Social Housing with the SHDF

The Social Housing Decarbonisation Fund (SHDF) : Wave 3 is set to revolutionise the energy efficiency of social housing across England. With a substantial £1.2 billion investment, the fund aims to upgrade social housing stock currently below Energy Performance Certificate (EPC) band C, bringing these homes up to modern energy standards. This ambitious initiative supports the installation of energy performance measures and promotes the widespread adoption of low-carbon heating systems, contributing to a more sustainable and equitable future.

Key Objectives

The Social Housing Decarbonisation Fund is designed to achieve several critical objectives:

Deliver Warm, Energy-Efficient Homes: Upgrading social housing will ensure that tenants live in warm, comfortable homes that retain heat more effectively, reducing the need for excessive heating.
Reduce Carbon Emissions: By improving energy efficiency and adopting low-carbon heating systems, the SHDF will significantly cut carbon emissions, contributing to the UK’s broader climate goals.
Tackle Fuel Poverty: Enhanced energy efficiency will lower energy bills, providing much-needed relief to tenants struggling with fuel poverty.
Support Green Jobs: The fund will create and sustain jobs in the green sector, bolstering the economy while promoting sustainable practices.
Develop the Retrofit Sector: By investing in retrofitting, the SHDF will foster growth and innovation in this crucial industry, setting the stage for future advancements.
Improve Tenant Well-being: Better living conditions will enhance the comfort, health, and overall well-being of social housing tenants.

Funding and Timeline

A total of approximately £1.2 billion is allocated for this initiative, which includes funding for Devolution trailblazers. This builds on previous SHDF waves: Wave 2.2, 2.1, 1, and the Demonstrator. The delivery window for SHDF Wave 3 extends to 30 September 2028, however all grant funding must be transferred to recipients and spent by 31 March 2028 (with co-funding allowed only in the final six months of the delivery period).

Application Routes

SHDF Wave 3 offers two routes to access funding:

The Challenge Fund is designed for most grant recipients. All applications meeting the scheme’s minimum standards will receive funding, though possibly less than requested if oversubscribed. This model supports a phased delivery approach, requiring detailed information about the homes only when each phase is ready to begin.
Strategic Partnerships is for a select group of grant recipients with a proven history of large-scale delivery (thousands of properties). These recipients, due to their demonstrated capability, are not required to detail specific homes and measures until after work is completed, as part of routine monitoring. Both individual and consortium applications are allowed for this route.

Potential applicants are strongly encouraged to begin preparations and build partnerships immediately. For assistance with application development, or to determine the most suitable funding route, visit the RISE – Retrofit Information Support and Expertise service (formerly the Social Housing Retrofit Accelerator).

Eligibility Criteria

Applicants

SHDF Wave 3 is open to:

Local authorities
Combined authorities
Registered providers of social housing (including housing associations and arms-length management organisations (ALMOs) that are registered providers)
Registered charities that own social housing

These organisations can apply directly either as single applicants or as leaders of a consortium. Additionally, organisations such as ALMOs that are not registered providers can participate as part of a consortium led by an eligible organisation.

Eligible Properties

All existing social housing defined by the Housing and Regeneration Act 2008 (sections 68-70) that are below EPC band C, regardless of type, are eligible.

Application Size

Applications through the Challenge Fund should include a minimum of 100 eligible social housing properties at EPC band D-G, except for small social housing landlords. Small social housing landlords, defined as those owning or managing fewer than 1000 homes, can apply with fewer than 100 homes. These landlords are encouraged to try to reach 100 homes or consider joining a consortium to leverage the associated benefits.

Background

The fund builds upon:

SHDF Wave 2.2: Allocated up to £80 million in grant funding starting in April 2024, continuing from the previous Wave 2.1.
SHDF Wave 2.1: Provided £778 million in government funding in March 2023, aimed at improving energy performance in approximately 90,000 social homes.
SHDF Wave 1: Enhanced energy performance in up to 20,000 social housing properties, resulting in reduced bills and lower carbon emissions.
SHDF Demonstrator: Upgraded up to 2,000 homes to at least EPC band C and supported over 1,000 local jobs.

Help & Support

If you have any enquiries about SHDF Wave 3, please email: shdfwave3enquiries@energysecurity.gov.uk.