The UK’s goal for all homes to meet minimum energy efficiency standards by 2030 is unlikely to be met, with leading banks predicting delays of up to 13 years.
New forecasts suggest it could be 2043 before most properties reach EPC Band C, the government’s benchmark for energy performance.
The shortfall threatens to derail climate targets and could leave homeowners facing higher bills, reduced property values and barriers to selling or remortgaging.
Financial institutions sound the alarm
UK Finance, representing the banking and finance industry, has highlighted the challenges in meeting the 2030 EPC targets, saying it could be until 2043 until targets are met.
They caution that the scale of required home upgrades, coupled with financial and logistical barriers, could lead to widespread non-compliance.
In their consultation response, UK Finance stated: "The timescale is challenging and overly ambitious, particularly if many properties cannot be improved on time in an economically viable and cost-effective way."
Similarly, Lloyds Banking Group has expressed concerns about the inadequate progress in decarbonising the UK's housing stock.
Rebecca Heaton, Director of Environmental Sustainability at Lloyds Banking Group, stated: "As the UK’s largest mortgage lender, we are concerned by the inadequate progress in decarbonising the UK’s 28 million homes. The UK has the oldest and draughtiest housing stock in Europe and progress is off track."
They advocate for abandoning the proposed 2028 deadline for new tenancies and suggest that achieving the 2030 deadline for all tenancies will depend on homeowners' understanding of necessary improvements and the availability of financial support.
The scale of the challenge
Currently, approximately 60% of the UK's housing stock falls below the EPC C standard.
To meet the 2030 target, an estimated 1.6 million properties would need to be upgraded annually, equating to retrofitting about 2,000 properties each day. Failing to meet this target could land homeowners a fine of up to £5,000.
This ambitious pace is further complicated by insufficient capacity in the retrofit supply chain and labour force.
Calls for government action
Industry experts and financial institutions are urging the government to provide clearer guidance and increased funding to support homeowners in making necessary energy efficiency improvements.
Which, the consumer advisory group, previously called for a review of EPC rating systems after it was found "too many EPCs do not provide an accurate assessment of the energy efficiency of a home".
Financial incentives have also been suggested from lending groups, including introducing grants, low-interest loans, or tax breaks to make upgrades more accessible.
A group comprising Mortgage Advice Bureau, TSB, Leeds Building Society, and Coventry Building Society has proposed a stamp duty refund for homebuyers who retrofit their property to achieve an EPC rating of C or higher.
They argue that such incentives would make energy-inefficient homes more attractive to buyers and catalyse a greater level of upgrading across the UK housing stock.
