"Lenders are committed to playing their part, and through the government’s Warm Homes Plan we have the opportunity to really make a difference"
- Ian Bhullar - UK Finance
UK Finance has released a new report calling for coordinated action to encourage the uptake of green home improvements, warning that current adoption rates for technologies such as insulation, heat pumps, and solar panels remain too low to meet the UK’s climate targets.
The report, Unlocking Demand for Green Home Finance, argues that a broad, cross-sector approach is needed to stimulate demand. It calls on the government to lead a public information drive, provide financial support, and set clearer long-term expectations to help homeowners, landlords, and housing associations retrofit their properties.
Drawing on YouGov research, the report explores public attitudes toward heat pump technology, a key area where uptake is lagging. The UK must install around 1.5 million heat pumps each year by 2035 to stay on track with net-zero targets, but consumer interest continues to fall short.
Among those surveyed, 54% cited high upfront costs as the main barrier to adoption, and 44% said they would consider switching if they understood the potential running cost savings
The report stresses that financial products alone will not drive demand. It highlights the need for behavioural change, supported by well-structured government policy and accessible, independent advice.
As part of its recommendations, UK Finance sets out nine actions it believes should be integrated into the forthcoming Warm Homes Plan:
Create a central government-led body to coordinate stakeholders
Offer policy certainty for firms operating in the retrofit sector
Launch a public awareness campaign with impartial advice
Expand grants, subsidies, and training for tradespeople
Adjust levies to rebalance electricity and gas prices
Use public funds to support affordable green lending
Maintain and grow existing grant schemes
Provide long-term policy clarity for households and businesses
Update energy efficiency metrics for consistent property assessments
“To meet our ambitious targets on greening the UK’s housing stock we need to drive demand and convince the public of the benefits," explained UK Finance director of sustainability policy Ian Bhullar. "Lenders are committed to playing their part, and through the government’s Warm Homes Plan we have the opportunity to really make a difference. Increasing demand for green home improvements will bring significant benefits, stimulate job creation, drive innovation, and reinforce the UK’s energy security in an increasingly volatile global market.”
Toby Leek, NAEA Propertymark President, comments, “Propertymark has always advocated for low-carbon heating systems that include heat pumps as a central component of achieving net zero.
"However, it is clear that costs are a barrier for many people when it comes to switching to these low-carbon alternative means to heat their homes. There are many government schemes out there, such as the Boiler Upgrade Scheme that gives households in England and Wales £7,500 towards replacing their old boiler system with a heat pump.
"At the same time, it is vital that the UK Government and the devolved administrations avoid a one-size-fits-all approach towards energy efficiency, as for example, older properties are not always able to add heat pumps, something that Propertymark will continue to campaign for.”
