05 Jun 2026
CIH response to Department for Energy Security and Net Zero (DESNZ) call for evidence on the design of the Warm Homes Fund (WHF)
Introduction
A warm, comfortable home is the foundation for good health and wellbeing. CIH therefore strongly supports and welcomes the government’s ongoing commitment to upgrading the energy performance of our homes and improving the affordability of heat and power. The £5 billion allocated to the Warm Homes Fund (WHF) via Capital Departmental Expenditure Limits (CDEL) Financial Transactions (FTs) forms a central part of this commitment, and CIH is pleased to have the opportunity to contribute ideas for how the WHF can have the biggest possible impact.
As a chartered housing body working across the whole of the UK, we have offered views on how the WHF could be implemented in all tenures and in all parts of the UK. We have grouped our responses according to the different sections of the call for evidence below. For convenience, we refer to ‘WHF-backed finance’ throughout this response as a general term for the range of loans and opportunities the WHF could offer.
Response to individual questions
2. Owner-occupiers (Section 2A) (Question 13)
2.1. We have three comments on the potential of using the WHF to support owner occupiers.
2.2. Firstly, we would encourage the government to consider innovative models for supporting low-income and vulnerable households in the owner-occupied sector through the WHF, rather than an approach that requires these households to directly take out finance themselves.
2.3. Requiring low-income owner-occupied households to commit to lending agreements and loan repayments could exacerbate existing financial hardship (and its associated negative health impacts), and we share the concerns of some consumer bodies that the potential for mis-selling and/or exploitation could occur.
2.4. We are aware of alternative suggestions for how the WHF could target low-income households in the owner-occupied sector, such as those devised by Agility Eco, and the government should consider whether these models offer a pathway to deploying WHF-backed finance in a way that eliminates or minimises financial risk for beneficiary households while ensuring the objectives of the WHF are met.
2.5. Secondly and relatedly, our view is that the government should continue to see grant funding as the primary delivery mechanism for fuel poverty support to low-income households across the UK. Although outside the scope of the call for evidence, we are concerned that following the closure of the Energy Company Obligation (ECO4), there are significant geographical gaps across Great Britain in the availability of support. For example, the Warm Homes: Local Grant offers grants to low-income owner-occupied households in England, but not all local authorities deliver it, and we understand that some grant recipients have had to curtail their retrofit programmes due to unforeseen challenges. In addition, in Northern Ireland, there is an urgent need for additional support. The WHF should not be seen as an effective replacement for delivering fuel poverty support to low-income owner-occupied households through grants, even if a delivery mechanism of the kind proposed by Agility Eco is adopted.
2.6. Thirdly, we see a clear role for the WHF in supporting middle-income owner-occupiers with the high upfront cost of low-carbon technologies. Low-interest loans, deployed through existing financial institutions such as banks and credit unions, working in partnership with installers or energy companies, could support owner-occupiers to benefit from a range of solutions, including solar PV and insulation. We also agree this type of approach could be suitable for heat network connections and gas disconnection, as described in Section 2F of the call for evidence. Crucially, the design of any scheme for middle-income owner-occupiers must learn from the issues experienced by previous loan and grant schemes, particularly the Green Deal and the Green Homes Grant, and be accompanied by robust consumer advice, protection, and redress where necessary. It should be simple to access, and offered at below-market rates.
3. Landlords and tenants (Section 2B) (Questions 21-28)
3.1. We concur that the WHF could support private and social landlords to upgrade the energy performance of their homes and meet ambitious new Minimum Energy Efficiency Standards (MEES) in both rented sectors. We also largely agree with the discussion in the call for evidence that WHF-backed finance could be an attractive proposition to landlords in both rented sectors as it is less dependent on eligibility criteria. It can also be accessed outside of short-term grant funding cycles and application timelines. We would encourage the government to consider the nuances and differences between different types of social and private landlord. The exact type and length of WHF-backed finance that is most appropriate, for example, will differ among housing associations, stock-holding local authorities, small private landlords, and social purpose-driven private landlords.
3.2. In addition, targeting WHF-backed finance within the rented sectors could aid the government’s ambition to support low-income and vulnerable households with energy costs. In 2024-25, social renters were concentrated in the lowest two income quintiles (50 per cent were in the lowest income quintile and 25 per cent in the second lowest), and approximately three in five social rented homes contain an occupant with a long-term illness or disability, who often need to spend more on energy to stay warm and healthy at home. Meanwhile, fuel poverty levels are highest in the private rented sector, and there is growing evidence that the wider affordability challenges facing private renters are deepening, with recent research from the Joseph Rowntree Foundation highlighting a perfect storm of housing, energy, and living costs.
3.3. We agree with the call for evidence that revenue and savings sharing models could hold significant potential for the social housing sector, and could overcome barriers regarding the upfront cost of measures that many social landlords experience. We would also note however that upfront cost is not the only barrier to retrofit in social housing. Borrowing headroom, the presence of multiple spending pressures and regulatory requirements (e.g. repairs and maintenance, building new homes), supply chain capacity and workforce challenges, electricity grid capacity and DNO responsiveness, and ongoing uncertainty about the detail of the policy design of MEES are all presently inhibiting the acceleration of energy performance upgrades in social housing.
3.4. With specific reference to revenue and savings sharing models, for these to be more widely adopted in the social rented sector, our engagement with members has shown there are several barriers that need to be addressed. These are:
3.4.1. Landlords require appropriate senior level assurance that these models are viable and deliverable, and will not materially affect compliance with other legal, regulatory, or governance obligations. This includes compliance with the Regulator of Social Housing’s economic and consumer standards; obligations that landlords have under the Building Safety Act (2022), Energy Act (2023), and Procurement Act (2023); and obligations under any other relevant pieces of primary and secondary housing legislation (e.g. fire safety). It also includes other areas of finance, governance, and consumer protection, such as any existing loan covenants, possible impacts on building insurance, and the presence of appropriate product safety standards.
3.4.2. Landlords also need support to understand the complexity of the models themselves. Our view is that for these models to move beyond the innovation phase described in the call for evidence and into wider early adoption, the government needs to work collaboratively with social housing sector bodies and other relevant stakeholders to raise awareness of their potential and develop a playbook of the different financing and delivery models that may emerge. In this context, relevant stakeholders would include the Regulator of Social Housing and the Retrofit Information, Support and Expertise service (RISE). The RISE could play an important role in providing independent, expert advice to social landlords about the utility of these models.
3.4.3. There are also a range of challenges that may emerge from the prospect of institutional investors (such as GB Energy or an electricity company) partially owning assets being installed on or within the curtilage of homes. Especially when those assets are directly linked to regulatory compliance (e.g. where solar PV is used to demonstrate compliance with MEES via the new Smart Readiness metric) and resident safety. To take advantage of these kinds of models, landlords may need to develop new approaches to installation, servicing, maintenance, and eventual decommissioning or replacement of the asset, and to synchronising these works with wider planned replacement and maintenance works. A common example here is the growing desire among social landlords to align roof replacement programmes with solar PV installation, which achieves cost efficiencies (e.g. due to only needing to erect scaffolding once) and avoids unnecessary costs at a later date (e.g. due to needing to temporarily to remove solar PV to replace a roof).
3.4.4. Social landlords need to be confident that energy bill savings will be realised and maximised for their residents, and that any possible consumer detriment is avoided. For example, landlords will require assurance that they or their residents will not be unfairly locked into contracts or charges for long periods of time, and that residents will be able to quickly and efficiently have issues or queries addressed. Resident support and engagement is critical for the success of retrofit, irrespective of whether the primary entity involved is a social landlord, contractor, or other third party.
3.4.5. Finally, our members have expressed a preference for any WHF-backed finance to be long-term and sufficiently flexible. Specifically, for WHF-backed finance to be widely adopted in social housing, it would benefit from being aligned with the longer-term retrofit strategies of individual landlords. Many social housing providers now have modelled decarbonisation pathways for their homes based on archetype. This modelling creates least-cost decarbonisation pathways for each archetype while being sensitive to the need to reduce energy bills for residents in the near-term. To the greatest extent possible, WHF-backed finance should seek to align with these pathways; it should be flexible enough to allow social housing providers to utilise it over timescales and payback periods that are synchronised with their long-term decarbonisation strategies.
3.5. If these barriers can be overcome through collaboration between the government and the social housing sector, we agree with the assessment in the call for evidence that delivery could quickly be scaled up.
3.6. On this theme, a final point we would make is that social landlords are not the only entity that could benefit from revenue and savings sharing models. CIH has members working in assets and sustainability roles for social purpose-driven private landlords that exist to provide long-term, affordable rental housing at scale. Many of these landlords are registered with the Regulator of Social Housing on a voluntary basis and rent homes at below-market rates. They display many of the same characteristics that are discussed in the call for evidence; they are committed to the rental market for the long-term and can therefore achieve suitable payback, and they tend to house low-income and vulnerable residents. They also have similar commitments to strategic asset management and achieving net zero as social landlords do. We would encourage the government not to homogenise private landlords as unsuitable for revenue and savings sharing models, and we would be pleased to work with the government to facilitate further dialogue with social purpose-driven private landlords on these models.
3.7. We also see potential for the WHF to support energy performance and quality upgrades in some of the most challenging buildings to finance and undertake retrofit, which are often owned and managed by social housing providers.
3.8. Specifically, mixed-tenure block of flats with significant proportions of owner-occupier and private-rented leaseholders are very difficult to upgrade, especially if they require additional works to improve (e.g.) heat network efficiency, fire safety, and general quality/decency. These works are often impossible to finance for building owners (especially not-for-profit entities like housing associations) and leaseholders (many of whom already face unaffordable service charges) due to the high cost and limited payback.
3.9. We would encourage the government to consider a specific offer to support the retrofit of mixed-tenure blocks of flats to regulatory standards (e.g. MEES, the new Decent Homes Standard, fire safety standards), which could take the form of a low-interest loan to the building owner to finance works while keeping any service charge contributions to the works by owner-occupier and private rented leaseholders at a minimum. The loan could be paid back over the long-term at a low-interest rate to ensure it is financially viable for landlords and minimises any longer-term service charge increases. We expect that for this approach to be feasible, the improvements to comfort, safety, and energy affordability for leaseholders would need to be significant to offset any small increase in service charges required for the landlord to repay the loan.
3.10. Crucially, a model of this kind would require an approach to eligibility that does not focus on a specific list of technologies, but on making holistic improvements to building fabric, heating, safety, quality, and decency. In turn, this may require moving beyond a narrow focus on financial return to broader ‘returns’ based on improved social value and health and wellbeing for residents and communities.
4. Heat networks (Section 2F) (Questions 61-65)
4.1. CIH supports the UK government’s ambitions to deliver one fifth of heating and hot water through heat networks by 2050, and the more recent target to more than double the amount of heat demand met via heat networks by 2035. Heat networks are one of the two central technologies for decarbonising our homes, and they can provide clean, affordable, and reliable heat and hot water to millions of households in the future. We subsequently support the analysis in the call for evidence that further financial support is required to decarbonise existing networks.
4.2. We also agree with the government’s intentions to improve technical standards across the heat network sector. Too many heat networks are inefficient, unmetered, and poorly maintained, driving up energy costs for households who rely on them and inhibiting the expansion of the heat network sector as a key zero-carbon heating solution. This is mostly because heat networks have not had similar levels of investment or regulation that other parts of the energy system have benefitted from, such as the gas and electricity distribution networks. Many heat networks were built to limited and now outdated specifications after 1945, and have not been upgraded since. As a result, for heat networks to play a central role in the provision of clean, affordable, and reliable heat and hot water, it is not in question that technical standards must be improved alongside decarbonisation.
4.3. CIH therefore supports the prospect of the WHF being used to support both a) decarbonisation of existing heat networks via capital support and b) technical improvements to existing heat networks. The discussion in the call for evidence regarding the high cost and complexity of upgrading heat networks and the limitations of current government grant funding programmes is reflective of discussions we have had with members working in social housing over the past few months. The upgrading of existing networks is especially challenging for social housing providers, most of whom operate heat networks on a cost recovery or loss-making basis. It is possible that without further financial support for the social housing sector, the government’s ambitions to expand heat networks may not be achieved. In a worst-case scenario, social landlords could seek to divest entirely from heat networks and replace them with other forms of heating (even before they reach end-of-life).
4.4. While we do not have specific views on how novel delivery mechanisms could work, our view is that to be successful, any delivery model should consider four factors.
4.5. Firstly, even if the WHF is designed to provide support for social landlords with the costs of meeting the requirements of the Heat Network Technical Assurance Scheme (HNTAS), CIH’s view is that HNTAS is disproportionately costly and complex. As we set out in our response to the HNTAS consultation, we estimate that the total cost of the current HNTAS design to the social housing sector in Great Britain alone could be between £2.9 billion and £5.7 billion.
4.6. It is clearly not feasible or desirable for the WHF to direct this level of support to meeting HNTAS, given other priorities set out across the call for evidence, and the current funding allocation to the Heat Network Efficiency Scheme (HNES) is at most five per cent of the anticipated costs. Our view is that the best way forward is for an alternative and simplified solution to be developed that delivers better outcomes for households connected to heat networks while significantly reducing the cost and complexity of the current HNTAS proposals. If this occurs, the WHF could provide support of the kind described in the call for evidence to social landlords to meet the costs of compliance over the next eight to ten years.
4.7. Secondly, we have reservations about the overall direction of heat network policy and its impact on the social housing sector. Our view is that more policy clarity is required on the interaction of heat network regulation, zoning, Minimum Energy Efficiency Standards (MEES), Energy Performance Certificate (EPC) reform, the Future Homes and Buildings Standard, and the design of the Home Energy Model (HEM), as well as HNTAS. To date, there has been very little recognition from the government and Ofgem as to the interplay between, and aggregate impact of, these policies. For example, the MEES consultation for the social rented sector did not mention heat networks at all (outside of the call for evidence on decarbonisation).
4.8. Accordingly, for social landlords to have confidence in any WHF-backed finance of this kind, more clarity is likely required on how the government intends these various policies to be enacted by social housing providers who own and/or operate heat networks. In other words, a clear, stable policy environment for heat networks across housing and energy is likely required if social landlords are to commit to accessing WHF-backed finance for decarbonisation and/or improving the technical standards of networks they own and operate. The alternative, as we have noted above, is that they may seek to replace their heat networks with other forms of electric heating.
4.9. Thirdly, if the two above conditions are met, we would also encourage the government to consider how to target WHF-backed finance to supported and older people’s housing providers. Supported housing provides invaluable housing and support for disabled people, homeless people, people with mental health problems, people who have experienced domestic abuse, and others, while housing for older people includes a range of different housing options to best suit individual need.
4.10. Both types of housing are relevant here because, although exact data on numbers does not exist, individual schemes are usually heated by communal heat networks. Supported and older people’s housing providers therefore bear a significant amount of the potential costs for heat network decarbonisation and improving technical standards, but are currently under severe financial pressure, with rising costs and diminishing funding streams. Research by the National Housing Federation shows that one in three supported housing providers had to close schemes in 2024 due to these pressures, and many more may be forced to close in the future. They are therefore less likely to be able to finance decarbonisation and technical improvements across their communal heating portfolios. Targeting WHF-backed finance, for example very low-interest loans with long payback periods, towards supported and older people’s housing could therefore have multiple benefits. It could reduce energy costs, improve technical standards, and drive decarbonisation, while protecting the quality and quantity of a critical form of housing that supports people to live safely and independently in their communities.
4.11. Fourthly and finally, we would emphasise the comments made in Paragraphs 3.6-3.9. Upgrading heat networks is often one of several quality improvements that needs to be made to mid- and high-rise blocks with communal heating systems. In many cases, these blocks require upgrades to building fabric, fire safety, and general quality/decency which are difficult to finance, especially for blocks with mixed-tenures or with complicated leaseholder/freeholder arrangements. There are also ongoing delays to remediation work to existing buildings through the Building Safety Regulator. For social landlords, these different improvements are not siloed into individual categories, but are required as part of a holistic approach to making blocks safe, warm, and healthy for their residents. We would welcome consideration of whether it is possible to develop WHF-backed finance for undertaking broader decency, energy efficiency, heating, and quality work alongside heat network upgrades.
5.1. Irrespective of how the government chooses to deploy WHF-backed finance, the highest standards of consumer protection, installation quality, and independent advice will be critical to building confidence among all stakeholders and beneficiaries and ensuring good outcomes are achieved.
5.2. As one of the aims of the WHF is to generate returns for government, a commitment should be made that any returns are recycled into further support for home upgrades. In other words, the WHF should – as an aggregate programme – be treated as a revolving fund.
5.3. Lastly, we welcome the commitment in the call for evidence for government to engage with devolved administrations. As a cross-UK professional body, it is vital for CIH that the WHF can respond to specific challenges that exist in the devolved nations. For instance, the high prevalence of oil heating and fuel poverty in Northern Ireland will likely require a tailored approach that may differ from the rest of the UK. Generally, the government should ensure that the WHF is aligned with devolved priorities and considers the views of stakeholders in Scotland, Wales, and Northern Ireland on the most effective pathway to delivery at scale.
For more information on CIH's response, please contact Matthew Scott, policy manager, matthew.scott@cih.org
