Updated: 28 April 2025
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Deciding whether to make your home or property portfolio more energy efficient (retrofitting) is an important and potentially expensive decision. We’ve highlighted some key considerations you should think about when you’re looking at your options as well as sources of financial help for your retrofit project.
Retrofitting means making changes that improve an existing building’s energy efficiency, and bring it closer to modern standards. At Handelsbanken, as well as halving our own greenhouse gas emissions by 2030, we’re committed to helping our customers on their own net zero journeys.
Buildings are the UK’s second-largest source of emissions Opens in a new window and we have the oldest and least energy-efficient housing stock in Europe. More than half of our homes were built before England last won the World Cup, and about a fifth were built over a century ago. More than 80% of homes in the UK use gas boilers, making them vulnerable to spikes in gas prices. That’s why if we’re going to meet our aim to reduce our carbon footprint, it’s important that we make our housing stock more energy efficient.
An average home could potentially save over £500 Opens in a new window on its annual energy bills by taking basic energy efficiency measures, and thus energy efficient homes can be more attractive to tenants. Finally, estate agents Knight Frank Opens in a new window estimate that improving a residential building’s energy efficiency can raise its value over and above regular local house price growth.
The UK government is consulting on proposals to raise the minimum EPC rating to ‘C’ for private rented accommodation, meaning it could be the right time to take a look at your property’s energy efficiency.
How energy efficient is your home already? Its Energy Performance Certificate (EPC) gives your home a rating from A to G, with A being the most efficient.
If it’s in England, Wales or Northern Ireland, you can find your property’s EPC here Opens in a new window – which includes not only its current rating, but the potential it could achieve with some upgrades. In Scotland, the process is slightly different and you can find out more about Scotland’s EPC register here Opens in a new window.
If you don’t have an EPC or your current one has expired, ask for an assessment Opens in a new window. You need a valid EPC before you can sell your home or rent it out.
We’re here to help, by providing businesses with finance for a variety of sustainable purposes. Find out more via the link below.
Retrofitting is a long-term strategy, investing upfront to enjoy the benefits over the coming years and decades.
If you live in an older property or have older properties in your investment portfolio, improving their energy efficiency is not only important for the future of the planet, it can make economic sense - and is better for yours and your tenants’ health too.
If you’re a landlord, you may be able to command higher rental levels for a more efficient property Opens in a new window, as tenants will expect to save money on their energy bills.
At the time of writing (April 2025) the rules on EPCs mean that you can’t commence or continue renting out a domestic or non-domestic property with an EPC rating below E, although some exclusions apply. As noted above, that may be about to change, and the rules in Scotland are different to those covering England and Wales (check out our guide to current EPC rules for more information).
In order for the UK to meet its legally-binding decarbonisation commitments, our housing and building stock must be decarbonised. This is likely to involve a continuing increase in minimum energy efficiency standards and building regulations, until eventually they result in net zero emissions. In the near term, the government is consulting on raising the minimum for private rented domestic property in England and Wales to EPC C from 2028 for new leases, and from 2030 for existing tenancies. For non-domestic property in England and Wales, the government confirmed plans to consult on a minimum EPC B rating by 2030, so watch this space.
These depend on your individual circumstances, not to mention your budget.
A deep retrofit is a comprehensive upgrade of the building, replacing or improving every item or system that contributes to energy efficiency. It can result in a 30-50% energy saving Opens in a new window and, in exchange for a higher initial outlay, can lead to significant reductions in operating costs, improvements in comfort and air quality, and a boost in the value of the property.
Of the measures listed below, heat pumps, solar panels and insulation materials - as well as any labour in installing them - are all VAT free.
Many homeowners will opt for some of the individual elements of a retrofit, which can include:
In the UK, solar panel installations have been considered a “permitted development” since 2008 and planning permission is not generally needed unless homes are in a conservation area. In November 2023, rules were relaxed further meaning that homes with flat roofs in conservation areas do not need to apply for planning permission either. Speak to a professional to learn more.
There has never been a better time to install solar panels, with prices having reduced approximately 90% in the past decade, and payback periods in many regions being eight years or fewer Opens in a new window.
What’s more, they may be able to generate income, in the shape of Smart Energy Guarantee (SEG) Opens in a new window payments, (see below) which in many cases will be tax free, if you’re feeding excess energy back into the grid. However, it’s worth checking with your supplier what your feed-in rate would be.
If your home isn’t insulated, it may lose around a third of its heat through the walls Opens in a new window and a quarter through the roof Opens in a new window.
Cavity wall insulation involves injecting material into the gap between your home’s inner and outer walls, if it has one (most homes built after the 1920s will). For walls without cavities, such as single skin walls, internal or external wall insulation may be possible.
Loft insulation can take two main forms – either insulating the floor of the loft with a material like mineral wool or natural alternative such as hemp or sheep’s wool; or alternatively fitting specialised boards between the rafters in your roof or using spray foam insulation. The latter is more expensive but may be suitable if you want to use your attic as a “room in roof” living space.
Draught-proofing existing doors and windows can be an inexpensive but effective option.
Ground or air source heat pumps extract ambient heat from outside and modern models are typically more than four times more efficient than gas boilers Opens in a new window.
The type you choose depends on your heating requirements, budget and available space, but either way you can say goodbye to gas heating bills. You’ll also see your substantially lower emissions continue to fall as the UK’s electricity grid decarbonises, while you may choose to install solar panels to cover some of your heat pump’s power requirements.
You can claim up to £7,500 of government funding towards installing one – in England and Wales, through the Boiler Upgrade Scheme, and in Scotland through the Home Energy Scotland grant and loan (see below).
Until recently air source heat pumps had to be installed more than one metre from a neighbouring property, but this restriction has been lifted in England. As well as this, eligibility criteria for the Boiler Upgrade Scheme has also been eased, to reflect the fact that a heat pump can still be effective even if your property is not particularly well insulated.
Aside from the obvious benefit of being warmer in winter and cooler in summer, your home will be quieter and less damp than if it’s single glazed (you will need to ensure you still have adequate ventilation however). You can choose wooden frames that complement your home’s appearance and even transfer the old panes into the new frames in some cases. If this isn’t possible, you may wish to consider secondary glazing.
The Energy Saving Trust estimates that if the average UK household replaced all its bulbs with LED versions, it would take about £40 off its annual electricity bill Opens in a new window. The upfront cost of around £100 would easily be recouped by the energy savings combined with greater lifetime of the LED compared to a halogen bulb – five times longer.
The Energy Company Obligation Opens in a new window (ECO) is a government energy efficiency scheme in England, Scotland and Wales designed to tackle fuel poverty and help reduce carbon emissions, focused on supporting low-income households. ECO is an obligation, placed on large and medium sized energy suppliers to deliver measures such as insulation, first time central heating, renewable heating, solar panels, and district heating connections to domestic premises.
The Great British Insulation Scheme Opens in a new window (GBIS) is a government energy efficiency scheme in England, Scotland and Wales formerly known as ECO+. It is designed to complement the ECO and boost help for those on the lowest incomes, as well as extending support to a wider range of households living in the least energy efficient homes (EPC bands D to G) and in the lower council tax bands.
The Smart Export Guarantee (SEG) Opens in a new window (SEG) supports small scale renewable power (electricity) generation. It does not offer upfront payments but households installing renewable power technologies will be paid by their energy supplier for each unit of electricity they supply to the grid (i.e. the excess to their domestic consumption). They will not be paid for electricity they use themselves.
Some energy suppliers may offer over and above the rate paid by the SEG.
The Boiler Upgrade Scheme Opens in a new window (BUS) provides grants of up to £7,500 to help fund the replacement of existing heating systems with ground or air source heat pumps. It applies to England and Wales only.
Many of the measures outlined in this article are part of the Westminster government’s Warm Homes Plan Opens in a new window, designed to help 300,000 homes find ways to save money on energy bills and deliver warmer, cleaner energy. The plan includes funding for fuel poverty schemes and for the BUS scheme to incentivise adoption of heat pump.
It also includes the Warm Homes: Local Grant scheme, which funds local authorities to provide grants for energy efficiency upgrades and low-carbon heating in low-income households with an EPC rating of D or lower in England.
Nest Warm Homes programme
The Welsh government operates its own warm homes programme, which provides grants for energy efficiency improvements to low-income households and those living in deprived communities across Wales.
Warmer Homes Scotland
The Scottish government’s Warmer Homes Scotland programme offers support worth up to £10,000 or more for eligible households for energy-saving home improvements like heating and insulation to help make your home warmer and cheaper to heat.
Home Energy Scotland grant and loan
This scheme offers up to £15,000 as a grant, potentially funding up to £7,500 for energy efficiency improvements and £7,500 for clean heating systems – for example, heat pumps.