As legally-binding zero carbon emissions targets for 2050 approach, the urgency to decarbonise the built environment has never been greater. Our homes account for 20% of national greenhouse gas emissions, largely due to reliance on fossil fuels for heating and hot water. Around 80% of today’s housing stock will remain in use by 2050, so retrofitting existing homes is key.
The scale of this challenge is immense. Retrofitting 29 million homes within 25 years demands not only technical innovation but also a coherent policy framework. Without decisive action, the UK risks falling short of its climate commitments, with significant implications for the environment and the cost of living.
High energy bills continue to place pressure on household finances. More than three million households in England currently live in fuel poverty. Retrofitting offers a clear and measurable solution. Citizens Advice estimates that upgrading all homes to at least Energy Performance Certificate (EPC) Band C by 2030 could result in nearly £24 billion in direct savings on household bills. These savings would ease financial strain for millions of residents and contribute to broader economic gains, bringing close to £40 billion in benefits to the economy by 2030 alone.
Decarbonising leasehold flats is vital
Among our housing stock, leasehold flats represent a substantial and often overlooked segment. Approximately 4.83 million homes in England are under leasehold arrangements – nearly 20% of all dwellings. Many of these (3.5 million) are flats, which pose unique retrofit challenges.
The importance of including leasehold flats in our national retrofit strategy cannot be overstated. Leaseholders in these homes already bear a disproportionate financial burden, particularly in relation to building safety issues stemming from remediation of historical construction flaws and the new regulatory regime. In addition, leaseholders often face dual energy charges, paying not only for their individual flat but also contributing to communal energy expenses. This layered financial responsibility means leaseholders typically incur significantly higher costs than the average resident.
Special attention required
Retrofitting leasehold blocks presents distinct physical and logistical challenges that set these properties apart from detached or semi-detached houses. The shared nature of these buildings – walls, roofs, staircases, floors, etc. – means that energy efficiency upgrades cannot be carried out by singular good-faith actors in isolation.
For example, installing cavity wall insulation in a single flat is often impossible – the cavity runs the full height of the building and thus must typically be installed in an entire block. Similarly, fitting solar panels on the roof of a leasehold block requires collective consent, as the roof is a communal asset. The same applies to replacing communal windows, installing heat pumps, or undertaking any structural changes that affect shared areas. Coordination across all leaseholders and the freeholder is essential, and often difficult to achieve.
Legal and financial constraints
Legal and financial constraints also present significant obstacles to retrofitting leasehold flats. Many leases contain restrictive clauses that prevent leaseholders from independently undertaking energy efficiency improvements. These provisions, often designed to safeguard the structural integrity of the building and protect other residents, inadvertently block even modest upgrades such as installing insulation or replacing windows. As such, many retrofit initiatives affecting communal infrastructure, or one flat, must navigate a complex web of permissions and approvals.
Meanwhile, in most cases, leaseholders are only responsible for paying for routine repairs and maintenance, not for enhancements or improvements. This distinction means that retrofit improvements usually need to be funded entirely by the freeholder. While this arrangement shields leaseholders from incurring unnecessary costs for unwanted building enhancements, it also creates a significant retrofit barrier.
The cost of retrofitting, then, is another major hurdle. Energy efficiency improvements can be expensive. Existing government funding schemes often overlook the unique challenges posed by multi-occupancy buildings, leaving leasehold flats underrepresented in national retrofit efforts and often blocked from accessing funding.
The role of the APPG for Future Homes, Skills and Innovation
Even with consensus and financing, retrofit delivery is often delayed by shortages of skilled tradespeople and materials, making improvements time-consuming and resource-intensive.
Thus, retrofitting leasehold flats demands more than technical fixes. Namely, investment in skills and a culture of innovation. This is where the APPG for Future Homes, Skills and Innovation comes in.
With 70% of the 2030 retrofit workforce already in employment, we must upskill existing workers, expand apprenticeships and align technical education with industry needs. Faster adoption of new technologies and a clear vision for housing delivery are critical.
The APPG is calling for targeted training to close the retrofit skills gap, funding schemes that support collaboration on leasehold properties, and joined-up policy across housing, skills and climate adaptation. It also champions UK-led innovation to improve housing quality and energy efficiency, ensuring homes are both warm and healthy.
Government intervention is essential
Without reform, this significant segment of our housing stock risks being left behind in the Net Zero transition.
The forthcoming Leasehold and Commonhold Reform Bill presents a timely opportunity to address these issues. By introducing implied terms that exempt energy efficiency upgrades from restrictive lease clauses, leaseholders would be empowered to take action. These reforms, together with skills and innovation, will be key to creating sustainable, future-ready homes.
Under the current system, the leasehold sector cannot be ignored on the race to Net Zero. The Government is already making real progress towards its Net Zero 2050 target and tackling fuel poverty through its Plan for Change, which is driving up housing standards and cutting energy bills by requiring all private landlords to meet EPC Band C or higher by 2030. The forthcoming Leasehold and Commonhold Reform Bill is the next chance to turn that momentum into lasting change, bringing an end to the feudal leasehold system and removing barriers to energy efficiency upgrades.
By taking decisive action, the Government can ensure that leaseholders are not left behind. The benefits – lower energy bills, improved living conditions, and a healthier planet – are too important to ignore.
