The UK government’s £3.4bn Warm Homes Plan is intended to transform home heating, making it cleaner, more affordable and more energy-efficient, helping to lift over one million households out of fuel poverty. With a strong push towards sustainability, this initiative offers significant opportunities for those involved in residential development, construction and design to align with evolving regulations and tap into new funding avenues to achieve growth.
The Warm Homes Plan: headline facts
With the latest announcement about its rollout in November 2024, the Warm Homes Plan represents a major step in reducing the carbon footprint of home heating while tackling energy costs. Key measures include expanded funding for energy efficiency upgrades, stricter rental property standards, and the relaxing of planning restrictions to support low-carbon heating solutions – with up to 30,000 homes set to benefit from upgrades in 2025 alone.
One of the most talked-about elements of the Warm Homes Plan is the enhanced Boiler Upgrade Scheme, which now offers homeowners up to £7,500 to install heat pumps. Additionally, the government has scrapped the one-metre rule, which previously meant that heat pump installations less than one metre from a boundary would need to obtain planning permission.
For rental properties, the Energy Performance Certificate (EPC) rating requirement of at least C by 2030 remains in place, encouraging improvements in insulation and heating efficiency. The government is also introducing stricter compliance measures to ensure quality retrofitting, including enforcement against substandard insulation installations and suspension of non-compliant businesses – this has been something of an issue historically, with some inappropriate installations and poor workmanship, and it’s something that needs to be done to ensure householder confidence in the Scheme.
The Warm Homes: Local Grant, a component of the Warm Homes Plan, will begin delivery in April 2025. The government has allocated £500 million to the Warm Homes: Local Grant over a three-year period, from 2025 to 2028. This funding will be distributed among eligible local authorities to facilitate the delivery of the scheme.
To qualify for the grant, households must be privately owner (whether owner-occupied or privately rented), classified as low-income (gross annual household income of £36,000 or less; residing in areas ranked in the lowest income deciles; receiving means-tested benefits such as Universal Credit or Housing Benefit), and with an Energy Performance Certificate (EPC) rating of between D and G. The scheme is inclusive of all fuel types, benefiting both on-gas and off-gas grid households, with grants available to cover energy efficiency improvements, including:
- Loft, cavity wall and solid wall insulation to reduce heat loss.
- Installation of photovoltaic systems to generate renewable energy.
- Installation of air source heat pumps and other sustainable heating solutions.
These upgrades are tailored to individual homes to ensure optimal energy performance enhancements. Notably, occupants on a low income will not be required to contribute to the cost of these improvements.
What this means for developers, contractors and design teams
- Rising demand for energy-efficient homes
With the higher grants and tighter efficiency standards brought in by the Warm Homes Plan, low-carbon heating solutions are moving from niche to mainstream. Developers who incorporate heat pumps into new builds will be well-positioned to meet future regulations while accessing government-backed funding. Contractors and installers can capitalise on this demand by gaining accreditation for heat pump installations and retrofitting projects. - Stricter standards for rental properties
Landlords facing EPC requirements will be seeking practical solutions to bring properties up to code, creating demand for insulation specialists, heating engineers, and retrofit experts. For design teams, there is an opportunity to specify more energy-efficient materials and systems, ensuring compliance with evolving regulations while enhancing property value. - Quality control and compliance
The government’s focus on quality assurance in retrofitting means that businesses must prioritise compliance with best practices. This shift presents an opportunity for professionals who can deliver high-quality, regulation-compliant work while reducing the risk of government intervention or project delays.
Looking ahead
The Warm Homes Plan represents a pivotal shift in the UK’s approach to home heating. For developers, contractors and design teams, this is the time to adapt. By leveraging government funding, improving compliance strategies, and integrating future-ready heating solutions, industry professionals can position themselves as leaders in the evolving energy landscape.
For more information on navigating these changes and implementing energy-efficient solutions, get in touch with AJ Energy at 01206 266755 or email mail@ajenergy.com.