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Earlier this year, CfRC met with Nottingham Energy Partnership to explore credit and home decarbonisation. Grant schemes tend to focus on the lowest-income or most vulnerable households, while wealthier households can use savings or mainstream finance. Between these sits a large group of lower- to middle-income households (LMI) who may not qualify for grants but cannot easily take on debt.
Tenure makes this more complex. Many LMI households live in private or social rented homes, where retrofit decisions often sit with landlords. Others are owner-occupiers with limited savings and borrowing options. These structural factors shape who can access retrofit finance, and whether finance-led approaches can work.
A new Warm Homes Fund
In March the Government launched its Warm Homes Fund call for evidence. [1] The Fund is expected to deploy £5 billion, including £1.7 billion for consumer loans and £3.3 billion for “innovative finance” models such as energy-as-a-service, equity investment and community-led approaches. £600 million is ring-fenced for low-income and vulnerable households. [1, 2]
Alongside this, Minimum Energy Efficiency Standards (MEES) will rise to EPC C across private and social rented homes by 2030. [2] The direction is clear: moving beyond grant-only delivery and seeking to mobilise private capital at scale.
The call for evidence: emerging themes
The call for evidence closed on 1 June. Full responses have not yet been published, but a number of organisations have set out clear positions. Four themes stand out.
Loans alone will not work for everyone
There is broad support for low- and zero-interest loans. UK Finance has backed the Fund as a way to expand green finance. [3] However, AgilityEco argues that even zero-interest loans can create barriers and proposes models with no upfront cost and no household debt. [4] NEA emphasises advice and non-debt-based support for vulnerable households. [5] For LMI households, cheaper borrowing does not remove the basic affordability constraint.
Advice and trust are fundamental
Multiple responses emphasise that finance alone will not drive uptake. Centre for Sustainable Energy stresses impartial advice and the limits of national services without local delivery. [6] Energy Saving Trust points to advice in enabling action, [7] while Citizens Advice underlines the need to rebuild confidence after poor installation experiences. [8] Trust is a precondition for engagement.
Gaps in what is being financed
A further concern is what consumer finance funds. The Sustainable Energy Association has criticised limited support for fabric efficiency measures such as insulation. [9] BEAMA similarly notes that many UK homes require comprehensive upgrades, not just technology-led interventions. [10] Without improving the fabric first, households may face higher running costs.
Structural issues still matter
Several responses highlight wider systemic challenges. The Heat Pump Association and NEA raise concerns about the electricity-to-gas price imbalance. [5, 11] UK Finance calls for clearer regulatory frameworks, including EPC reform and the Future Homes Standard. [3] The NRLA stresses tailored approaches for landlords. [12] Finance cannot operate in isolation from this policy environment.
Alongside this: the Green Home Finance Strategic Partnership
Running in parallel is the Green Home Finance Strategic Partnership, co-chaired by DESNZ and the Green Finance Institute. [13] It will design loan products, underwriting, customer journeys and protections, with rollout expected from April 2027. [13] Its effectiveness will depend on whether product design connects to the financing architecture behind it.
New Economics Foundation and Finance Innovation Lab propose preferential or dual interest-rate facilities through the Bank of England, giving lenders cheaper funding so rooftop solar and battery finance can be offered at lower cost. [20] This raises a key question for the Warm Homes Fund: where will capital come from, and how far should public institutions shape its cost and terms?
What looks particularly promising?
Two areas stand out because they move beyond traditional, individualised credit models: property-linked finance and neighbourhood-based delivery.
Public–private blended finance: the promise of property-linked models
Property-linked finance (PLF) represents a significant departure from conventional lending, but it is not wholly new. It revives an earlier question: how to attach retrofit costs to the property and its benefits, rather than only to the original borrower. The Green Deal had important property-linked features: where a home with a Green Deal loan was sold or rented out, the buyer or tenant had to be told that they would be responsible for repayments through the electricity bill. [16] Earlier Pay As You Save proposals similarly framed retrofit as a property-linked finance question. [17]
Rather than attaching repayment obligations only to individuals, PLF links them to the property itself. When a home is sold, both the benefits of the retrofit and the remaining repayments transfer to the new owner. In principle, this addresses a persistent barrier: reluctance to invest in improvements where households may move before benefits are realised.
This is particularly relevant for LMI owner-occupiers, many of whom face limited savings, restricted access to low-cost borrowing and uncertainty around housing mobility. By reducing upfront barriers and linking repayment to the asset rather than individual creditworthiness, PLF could expand access for households underserved by conventional lending. [14]
International experience suggests that such models can mobilise investment and reach households underserved by traditional finance. However, challenges remain. The UK’s regulatory framework, including consumer credit regulation and property transaction processes, is not naturally designed for obligations that transfer with the property. [14] Questions also remain around consumer understanding, disclosure, property values and communication.
Critically, PLF is not a solution for the lowest-income households. Even at low or zero interest, it still requires repayment of principal and depends on property ownership. Ring-fenced grant support and non-debt interventions therefore remain essential. [4, 5] From a CfRC perspective, PLF is promising because it reframes the relationship between finance, assets and households. Its success will depend on consumer protections and trusted advice.
Neighbourhood-based delivery
A second important development is the return to coordinated, neighbourhood-level delivery. Earlier programmes already tested this logic. CESP, which ran from 2009 to 2012, promoted a whole-house approach in defined low-income areas, with parliamentary analysis describing a community, street-by-street model led by energy suppliers, generators and local authorities. [18, 19]
The point is not that neighbourhood delivery is new, but that it is coming back into view. Under this model, social housing, private rented and owner-occupied homes are treated as part of a single delivery system. The benefits are structural: economies of scale reduce unit costs; coordinated delivery supports infrastructure planning; area-based targeting improves sequencing; and visible local activity can build participation.
The point, then, is not that neighbourhood delivery is new, but that it is coming back into view. Under this model, social housing, private rented and owner-occupied homes are treated as part of a single delivery system. The benefits are structural: economies of scale reduce unit costs; coordinated delivery supports infrastructure planning; area-based targeting improves sequencing; and visible local activity can create peer effects and build participation.
Neighbourhood delivery also changes the institutional model. Local authorities, housing providers, community energy groups and third-sector organisations can provide trusted local presence. This is particularly significant for social housing providers, which must meet MEES by 2030. For lower-income residents, benefits include lower bills, warmer homes and reduced disruption, alongside local jobs and community investment.
Neighbourhood approaches may also address barriers in the private rented sector by bringing landlords into coordinated programmes. This matters because retrofit is not simply a consumer choice, but a system-level challenge. Finance becomes more effective when embedded within delivery structures that households understand and trust.
What does this mean for the Warm Homes Fund?
Taken together, these developments point to a more coordinated approach to retrofit. The challenge is not simply to unlock finance, but to design arrangements households can use—and to learn from previous attempts to link finance, neighbourhood delivery and consumer protection.
Property-linked finance changes how repayment obligations are structured; preferential public funding facilities would change the cost of capital. Both point beyond new green loans towards arrangements that reduce upfront risk, lower borrowing costs and embed advice and protections.
The Warm Homes Fund is an important step forward because it recognises that scaling retrofit requires more than grants alone. [1, 2] But it also highlights the limits of a finance-led approach if finance is treated only as consumer product design.
For LMI households, the priority is arrangements that reduce risk, lower costs and are usable in practice. Property-linked finance attaches repayment to the home and its benefits, not only to the individual borrower. NEF and Finance Innovation Lab point to a complementary route: using public financial institutions to reduce funding costs. Together, they show that retrofit depends not just on new loan products, but on whether public policy shapes financial markets for households. [14, 20]
References
[1] Department for Energy Security and Net Zero (DESNZ). (2026, 24 March). Warm Homes Fund: innovative finance for investments and loans - call for evidence. GOV.UK. https://www.gov.uk/government/calls-for-evidence/warm-homes-fund-innovative-finance-for-investments-and-loans
[2] Department for Energy Security and Net Zero (DESNZ). (2026, January). Warm Homes Plan. GOV.UK. https://www.gov.uk/government/publications/warm-homes-plan
[3] UK Finance. (2026, 2 June). UK Finance responds to DESNZ call for evidence on the Warm Homes Fund. https://www.ukfinance.org.uk/policy-and-guidance/consultation-responses/uk-finance-responds-desnz-call-evidence-warm-homes-fund
[4] AgilityEco. (2026). AgilityEco responds to government Warm Homes Fund consultation. https://www.agilityeco.co.uk/news/articles/agilityeco-responds-to-government-warm-homes-fund-consultation/
[5] National Energy Action (NEA). (2026). Warm Homes Plan policy page. https://www.nea.org.uk/what-we-do/policy/warm-homes-plan/
[6] Centre for Sustainable Energy (CSE). (2026, 21 January). CSE responds to the Warm Homes Plan [response to Warm Homes Plan; specific call for evidence submission not publicly available]. https://www.cse.org.uk/news/warm-homes-plan-response/
[7] Energy Saving Trust. (2026, 22 January). What the Warm Homes Plan means for you [response to Warm Homes Plan; specific call for evidence submission not publicly available]. https://energysavingtrust.org.uk/what-the-warm-homes-plan-means-for-you/
[8] Citizens Advice. (2026, 1 June). Citizens Advice response to DESNZ Warm Homes Fund: Call for Evidence. https://www.citizensadvice.org.uk/policy/publications/citizens-advice-response-to-desnzs-warm-homes-fund-call-for-evidence/
[9] Sustainable Energy Association (SEA). (2026, 17 February). The benefits and drawbacks for sustainable energy in the Warm Homes Plan. https://sustainableenergyassociation.com/the-benefits-and-drawbacks-for-sustainable-energy-in-the-warm-homes-plan/articles/
[10] BEAMA. (2026, 21 January). BEAMA responds to Warm Homes Plan [response to Warm Homes Plan; call for evidence submission is members-only]. https://www.beama.org.uk/what-s-new/news/beama-responds-to-warm-homes-plan.html
[11] Heat Pump Association UK (HPA UK). (2026, 21 January). HPA UK comments on the Government Warm Homes Plan. https://www.kamrenewables.co.uk/2026/01/21/hpa-uk-comments-on-the-governments-warm-homes-plan/
[12] National Residential Landlords Association (NRLA). (2026, 2 June). Warm Homes Fund: Landlords need targeted support. https://www.nrla.org.uk/news/warm-homes-targeted-support
[13] Green Finance Institute (GFI). (2026, 3 February). Warm Homes Plan: Green Home Finance Strategic Partnership. https://www.greenfinanceinstitute.com/programmes/warm-homes-plan-green-home-finance-strategic-partnership/
[14] Nesta. (n.d.). Can property linked finance unlock the heat pump market? https://www.nesta.org.uk/project-updates/property-linked-finance/
[15] Ministry of Housing, Communities and Local Government. (2025, 4 December). Chapter 1: Profile of households and dwellings. English Housing Survey 2024 to 2025: Headline findings on demographics and household resilience. GOV.UK. https://www.gov.uk/government/statistics/chapters-for-english-housing-survey-2024-to-2025-headline-findings-on-demographics-and-household-resilience/chapter-1-profile-of-households-and-dwellings
[16] Department for Energy Security and Net Zero (DESNZ). (n.d.). Green Deal. GOV.UK. https://www.gov.uk/green-deal
[17] UK Green Building Council (UKGBC). (2022, 11 October). Pay As You Save. https://ukgbc.org/resources/pay-as-you-save/
[18] Ofgem. (n.d.). Community Energy Saving Programme (CESP). https://www.ofgem.gov.uk/community-energy-saving-programme-cesp
[19] House of Commons Library. (2013, 16 August). Community Energy Saving Programme (CESP). https://commonslibrary.parliament.uk/research-briefings/sn06197/
[20] New Economics Foundation and Finance Innovation Lab. (2026, 7 July). Financing a rooftop energy revolution: How lower-cost finance could deliver bill savings to millions with no upfront costs. New Economics Foundation. https://new-economicsf.files.svdcdn.com/production/files/Financing-a-rooftop-energy-revolution-briefing.pdf?dm=1782920140
