Residential property Retrofitting household costs

Decarbonising Residential Properties

Q3 2023

Why should we be decarbonising existing residential properties and where can we start?

Residential properties account for around 20% of the UK total CO2 emissions. Looking at today’s existing housing stock, 80% of it will still exist by 2050, and 60% of current UK homes are over 80 years old. In this context, there is an urgent need to retrofit these properties to be more energy efficient and minimise their environmental footprint in the long-term, to help meet the UK’s net-zero targets by 2050.

Currently, EPCs are the only required certification to assess a property’s current and potential energy performance. However, these certificates are flawed as they do not represent the real energy performance of a building. For example, EPC calculations do not take into consideration the materials a building is made of and make incorrect assumptions about energy sources (i.e. the calculations assume all electricity is produced from coal).

Although it is widely viewed that EPCs are not adequate in assessing a building’s energy efficiency potential, they do help in categorising properties in the private rented sector (PRS). In 2022, 54% of homes had an EPC of D or under, which may seem low but it is an improvement on the 86% rated D in 2010.

However, the PRS is not the most challenging part of the housing sector to deal with, as it only accounts for around 4.5 million homes, compared to over 18.5 million homes that are owner occupied, and 4.5 million social housing properties.

Regarding new homes, 16% of those built in 2022 were EPC rated D or below. With the current knowledge and technology available for a sustainable future, such houses with poor energy performance should no longer be built, especially with the full knowledge that they will need to be retrofitted very soon if we are to meet the 2050 net-zero targets.

Retrofitting a residential property has many other benefits, not solely linked to minimising its environmental impact

Aside from retrofitting making a property more energy efficient, reducing emissions and energy consumption, it also has some other key wider benefits:

1. It improves the living comfort and health of the inhabitants. Poor living conditions have a significant impact on society, costing the NHS over £1.4 billion annually in health treatment for people living in unhealthy environments, such as properties where mould is present on walls and with poor ventilation.

2. It supports a sustainable economy through the creation of green jobs. Retrofitting properties calls for a new type of skillset in the building industry, which therefore creates more jobs and supports the wider UK economy.

3. It can increase property value. An energy efficient and decarbonised house can sell at a higher price than one which is less so. However, this might be for a limited period only, if energy efficient and low carbon footprint homes are expected to be the norm a few years from now.

4. It reduces household running costs. Our latest Housing Futures Survey found that 69% of respondents said that ‘lower household running costs’ would be the greatest incentive to move to a more sustainable home. We also found that for over three-quarters of home movers, reducing running costs and having a more energy efficient home is an important motivation to move. This has increased from 70%of home movers surveyed last year.

Why are we not retrofitting more properties?

Considering how significant the public benefits of retrofitting are, one may ask why it is not being done more widely. Unfortunately, they are multiple challenges that need to be overcome. These challenges include but are not limited to:- It can be challenging to retrofit older and heritage properties without damaging their historic features.- There is a lack of workforce with the appropriate skillset, although the Building Back Better government strategy should help tackle this gap by increasing investment in green jobs.- The rising cost of living leaves little spare cash for homeowners or landlords to invest in retrofitting their properties. The UK Government Retrofit for the Future Programme estimated that it costs on average £150,000 per property for its retrofit and reduces carbon emissions by up to 80%.- The lack of houses to buy,and so stronger demand for houses available, has reduced the incentive for vendors to retrofit their homes.- Frequent changes in government policies and decisions does not create the best environment for a push towards a more sustainable future.

Retrofitting an existing residential property – the key things to look at

Thermal insulation is an important feature to look at and will vary depending on the type of property you are dealing with. For example, detached houses present much more opportunity to lose heat through the walls compared to semi-detached or terraced houses. When choosing an insulation material, non-flammable and breathable material should be a priority, such as wool insulation.

Windows, doors and conservatories
All of these, if drafty, can reduce a dwellings energy efficiency. For listed buildings, this may prove to be challenging as preserving their historical authenticity must go hand in hand with improving their insulation. Some companies offer energy efficient products that can be fitted into existing wooden frames.

A ventilation system helps to ensure air circulation, improve air quality and reduce condensation and mould formation.

Air tightness
Just like insulation, air tightness is a fabric first approach and helps to make a building more thermally efficient. It is important to consider areas of the home such as junctions between the floor and walls, walls and roof, window frames and doors, cables and pipes. Remember that a property can be (and should be) both airtight and breathable – the two are not mutually exclusive.

Thermal bridging
A thermal bridge in building insulation is an area of a building construction which has a significantly higher heat transfer than the surrounding materials. For instance, thermal bridging is quite common in Victorian buildings, where timber joints within the insulation zone are indirect contact with both the inside of the home and the outside, meaning that heat transfers through the timber, leading to heat loss. Thermal bridging can be responsible for up to 30% of a dwelling's heat loss and can also lead to the development of mould growth due to constant dampness in an area of the home.

Ensure that walls can breathe. For instance,brick walls absorb a lot of water when it rains, so using a breathable sealant to treat brick surfaces is crucial to avoid trapping in water under the surface of the bricks, which can lead to damage. Moreover, getting the drainage system checked regularly is crucial as a poorly installed system can contribute to letting moisture in.

Measuring the environmental impact of a property and its lifetime cost
When looking at the environmental impacts of a property, both the operational carbon (global warming potential linked to the operational and usage of the building) and the embodied carbon (global warming potential of the building materials used, the construction, maintenance and replacement of the building) need to be looked at. For this, the Total Cost of Ownership and Life Cycle Assessment are useful tools to assess real environmental impacts.

Total Cost of Ownership (TCO)
TCO takes into account the costs related to the initial investment in an energy supply (i.e.installation of gas boiler or solar panels), the cost of the energy consumption over the lifetime of the building (i.e. cost of gas used) and any replacement/disposal costs (i.e. boiler maintenance or replacement of solar panel).

Life Cycle Assessment (LCA)
LCA is an environmental accounting method, which ‘seeks to quantify the environmental impacts over the infrastructure life cycle by identifying the costs during each phase’ (definition from MIT). Those phases include the production and construction stage, the use stage, the end-of-life stage and the potential for reusing/recovering/recycling any of the materials. Please see below an illustration of the carbon cycle in the built environment.

Sources of emissions by life cycle stage of a building (the Carbon Leadership Forum, 2018)

If you have further questions on how to decarbonise an existing residential property, how to assess its environmental impact or costs related to retrofitting, please contact our in-house building surveyor Alex Macfarlane.