For those with capital, there is real money to be made from insulating your house.
Whilst you may not agree with the tactics of Insulate Britain blocking the M25, it is difficult to deny that they have a very valid message. In the UK, we have some of the worse-insulated houses in Europe – making them hot in the summer and cold in the winter.
It tends to be the older, larger houses occupied by more wealthy families that are responsible for the largest emissions, which will probably include many drivers sitting in their SUV’s swearing at Insulate Britain on the M25. So, why isn’t the media or the Government telling these wealthy families that if you live in an older, poorly insulated property, one of the best returns on your investment, at this present moment, can be made by improving the energy performance of your house?
When investing in improving insulation in your house there has been a tendency for people to think about payback times. This is a serious mistake. Do you think about the payback time when you buy a new car? No, you know it will have lost several thousand pounds by the time you drive it out of the showroom.
Devon-based Mitchell and Dickinson has been insulating period and listed properties since 2010, concentrating on draft proofing, ceiling insulation and secondary glazing. Typically, reducing household heat loss by 40-50 per cent and giving returns on investment of 7-12 per cent per annum.
Work by Severn Wye Energy Agency and Stroud District Council in 2011 found the average cost of a deep retrofit was £22,000 (from £12,967 to £46,900) with annual energy bill savings from £196 to £2194. The greatest saving in those properties was made where wall and loft/ceiling was the preferred measure, rather than installing Solar PV or Solar thermal, the average return across properties being 5 per cent per annum.
When we moved into our 200-year-old red-brick property it had no insulation, rotting sash windows and a dogy gas boiler. It was like an oven in the summer, bloody freezing in the winter, and the windows rattled in the slightest breeze. We gradually improved the energy performance of our house over seven years, spending a total £23,000, and by 2012 were saving over £3,000 per annum on our energy bills, 10 tonnes per annum on our carbon emissions, with our house now warm in the winter and cool in summer.
As with any investment, it is wise to get independent advice from a suitably qualified retrofit assessor. This should cost around £500 and provide you with a detailed assessment of the retrofit measures suitable for your property and the expected savings. This will help prioritise your investments, assess contractors’ claims, and avoid expensive mistakes.
It is a common misconception that listed buildings cannot be retrofitted. Listed building consent may be required for some work, but as long as you are not destroying key features or significantly changing appearance this is not necessarily a problem. An early conversation with your local council building conservation department is wise, and never accept ‘no’ as the first answer. Again, professional advice can help speed up any listed building consent applications.
Clearly, not everyone can afford this level of investment in their property but those that have can kickstart the retrofit revolution. The financial impacts of the covid pandemic on households have been very divisive – it has left many families struggling to make ends meet, but for some, there has been a financial silver lining.
The deputy governor of the Bank of England recently told Radio 4 that as many people's incomes were held up and spending was restrained, they have amassed around over £125 billion of excess savings.
With interest rates still low and the top ISA’s are paying in the region of 0.8 per cent on fix three-year deposits, and maybe up to 1.7 per cent for a 10-year fix, there is a real dilemma for savers. If you have savings and are likely to continue working from home, now is the time to improve the energy performance of your home. For those approaching retirement and planning to stay put, making your home super-efficient will not only bring a good return on your investment but will also insulate your home and your pocket against future energy shocks.
So why isn’t the Government encouraging those that have to leave a legacy to future generations of super-insulated homes for the future? Why isn’t the Government encouraging those with savings to kickstart the retrofit revolution to help save the planet, whilst also making a handsome return?
I will leave you to answer those questions.
If Government ministers want to help this along, rather than talking in warm platitudes, perhaps they should cut VAT on all insulation materials, with a zero rating for all insulation materials made in the UK and a massive investment in training for all those skilled retrofit engineers we are going to need to help.