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Warm Homes

Warm Homes: New Wave of Retrofit Funding

Yesterday the Secretary of State for Energy Security & Net Zero, Ed Miliband, unveiled the next wave of retrofit funding – the “Warm Homes: Social Housing Fund” and the “Warm Homes: Local Grant”.

Warm Homes Plan

These initiatives are part of the Labour Government’s Warm Homes Plan, which aims to improve homes across England by making them more energy-efficient and affordable to maintain, with upgrades ranging from new insulation to the installation of solar panels and heat pumps.

The plan will empower devolved governments and local authorities with the necessary resources to upgrade cold, drafty homes in their regions; whilst also generating jobs nationwide for builders, electricians, plumbers, carpenters and architects.

The Warm Homes: Social Housing Fund

The Social Housing Fund Wave 3 aims to upgrade a large portion of social housing currently below Energy Performance Certificate (EPC) band C, bringing them up to this standard. It will facilitate the installation of energy efficiency measures in social homes across England and contribute to:

Providing warm, energy-efficient homes
Reducing carbon emissions
Combating fuel poverty
Supporting green jobs
Expanding the retrofit sector
Enhancing the comfort, health, and well-being of social housing tenants

Application routes

The Challenge Fund approach ensures that all applications meeting the scheme’s minimum requirements will receive funding, although the amount may be reduced if the scheme is oversubscribed. This model also supports a phased delivery approach, requiring detailed information on homes only when a phase is ready to begin implementation.
Strategic Partnerships offer funding to organisations with a strong track record of successful delivery and ambitious plans that align with key Strategic Priorities, particularly for large-scale projects. These organisations are not required to provide detailed information on specific homes and measures upfront, with this information only needed during routine delivery monitoring as works progress.

Eligibility

Wave 3 is open to the following groups:

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

Eligible organisations can apply directly to Wave 3, either individually or as the lead in a consortium. Additionally, the above organisations, along with ALMOs that are not registered providers, can participate as part of a consortium led by an eligible organisation.

All Wave 3 projects under the Challenge Fund must include at least 100 eligible social housing properties with an EPC rating of D to G, except for projects involving small social housing landlords.

Delivery

Wave 3 will be delivered through to September 2028. All grant funding for Wave 3 projects must be allocated to the grant recipients and fully spent by 31 March 2028, and co-funding can only be used during the final six months of the delivery period.

(External Wall Insulation)

The Warm Homes: Local Grant

The Local Grant will commence in 2025, offering energy efficiency upgrades and low-carbon heating through local authorities to households that meet the following criteria:

Located in England
Low-income households
Have an Energy Performance Certificate (EPC) rating between D and G
Privately owned, whether owner-occupied or privately rented

Application Route

The funding allocation model for the Warm Homes: Local Grant uses an Expression of Interest (EoI) process, ensuring that all eligible local authorities (LAs) submitting an EoI will receive some level of funding. This simplifies the process compared to previous competitive models like the Challenge Fund or the Local Authority Delivery (LAD) scheme.

For the drawdown of funding, LAs will receive up to 20% of their allocated funds upfront each financial year, with the remaining funding accessed through a streamlined batch system. This system allows LAs to submit batches of homes ready for retrofit, ensuring the DESNZ has full visibility of delivery progress while enabling more efficient fund allocation and monitoring of spending trends.

Eligibility

IMD:ID Eligible Postcodes – Households located in postcodes within Income Deciles 1-2 of the Indices of Multiple Deprivation (IMD 1-2).
Income Proxies – Households receiving specified means-tested benefits or meeting the current ECO4 Flex criteria under Route 2.
Household Income Threshold – Households with a gross annual income below £36,000, or below the equivalised ‘After Housing Costs’ threshold based on their household composition.

Funding is restricted to households in England living in homes with an EPC rating between bands D and G, which corresponds to an Energy Efficiency Rating (EER) SAP score of 68 or lower. Park homes, which generally do not have an EPC rating, are an exception to this rule.

Eligible Measures Under Warm Homes

Eligible measures include any energy efficiency and heating improvements that enhance a home’s energy performance and help reduce household energy bills. These include, but are not limited to:

Insulation (wall, loft & underfloor)
Solar Photovoltaic (PV) panels
Low carbon heating (such as air source heat pumps)

Scheme Guidance

Organisations seeking guidance and support for the Warm Homes schemes can access official resources through the following:

The Warm Homes schemes will play a key role in enhancing the quality of life for households, whilst also contributing to the UK’s broader Net Zero goals.

Good to luck to everyone with their bids!