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Transitioning the UK’s housing stock to achieve Net Zero

Publication date:

01 June 2022

Last updated:

01 June 2022


Esther Dijkstra, Director of Strategic Partnerships, Lloyds Banking Group

Making UK homes “greener” has never been more relevant – or urgent.

The cost of living is rising, and so are our energy bills. So what will it take to transition the UK’s housing stock to achieve Net Zero, and what can we do to support UK citizens in the process?

Latest figures suggest that UK homes currently account for 23% of the UK’s total carbon dioxide emissions and 35% of energy use. With millions of homes that still need to transition to become low carbon, we’re talking about a potentially massive impact on our national economy, on personal prosperity, as well as on global sustainability goals as a result.

It therefore shouldn’t come as a surprise that the “greenness” of the UK’s homes is an important factor that increasingly features in our thinking and planning. As the market leader in mortgages, we believe that Lloyds Banking Group has an important role to play in supporting every section of the housing market.

We’re putting ourselves at the centre of this transition, too: we have committed to reduce the carbon emissions we finance by more than 50% by 2030 on the path to net zero by 2050 or sooner.  But we also know that for truly effective results, collective action is needed – which is why I wanted to take a moment to talk through some of the steps being taken across the Group to help customers through the challenges they’re facing.


Financing a green housing revolution

At the heart of our work in improving the green credentials of Britain’s homes is our extensive green mortgage and loan provisions. We’re proud to be by the side of home-buyers and builders alike, whether help is needed immediately or long-term. Ultimately, the plan is to provide £10 bn of green mortgages over the next 3 years between Lloyds Bank, Halifax and Bank of Scotland.

We are exploring options to help landlords improve properties for their tenants, not only to comply with current and future planned EPC minimum standards, but to improve standard of living in the private rental sector too.  We have seen shift towards more energy efficient buy to let properties, and landlords borrowing to upgrade their existing portfolios. This not only future proofs their investment, it makes sure the increasing demand from tenants for energy efficiency is met. A win-win for people and the planet.

Alongside new property developments, there’s also an important job to be done in improving and retrofitting existing stock. That’s why for existing homeowners, we’re providing more loans to retrofit and make energy efficient improvements to their homes, from double glazing or boiler changes to insulation and low-energy lighting.

We strongly believe that financing a green housing revolution will be core to helping Britain prosper. For this reason, we’ve brought in a series of incentives to support customers who choose to take steps towards a carbon-neutral future. Earlier this year, we launched our Green Living Reward across a number of our brands, giving mortgage customers up to £1,000 cashback when making energy efficiency improvements, while Halifax’s green mortgage cashback scheme offers £250 to those buying homes with an EPC rating of A or B.


Working alongside homebuilders

I mentioned earlier that we’re proud to be by the side of homebuyers and homebuilders alike. That’s because we think that some of the most crucial work we can do, is to collaborate with homebuilders to ensure that tomorrow’s homes are as energy-efficient and green as possible – and this includes both private and social housing.

Last year, we had the pleasure to work closely with Hill, an award-winning family-owned and operated housebuilder in London and the South-East. Lloyds Bank supported Hill with a £220m sustainable funding arrangement (with a loan margin linked to several ESG targets) to boost Hill’s plans to advance its ESG and Net Zero credentials by 2030.

Hill told us how alongside regeneration schemes and inner-city redevelopment projects, it’s aiming to create lasting environmental and social impact. This is exactly the type of project that we’re keen to support, and that we’re going to continue to look out for as part of our commitments.


Educating homeowners

Finally, and perhaps most importantly, we are raising awareness of the impact homes have on the environment, and how simple and affordable it is to make a meaningful – and rewarding – action.

We have a range of services for homeowners themselves to increase knowledge of where they can improve their home. The Halifax Green Living hub can help customers (and homeowners in general) get a better sense of their home’s carbon credentials, while Halifax home insurance customers can download the My Carbon Manager app which offers tips on increasing energy efficiency.

Our commercial customers also have access to Lloyds Bank’s Green Buildings Tool, so commercial landlords can identify, evaluate and understand the estimated outcomes of potential investments.

At the end of the day, it’s a very simple concept: the more sustainable our homes become, the better off customers and the planet will be. What’s clear is that for a green future to become a reality, cross-industry collaboration is paramount. All of us, from mortgage providers, to intermediaries, to brokers, have a vital role to play today to make sure this happens – and we at Lloyds Banking Group are ready to do our part.


This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.