Deep carbon emission reductions in existing UK social housing: are they achievable, and how can they be funded?

As part of the UK's effort to combat climate change, deep reductions in carbon emissions will be required from existing social housing. The potentially high cost of the required stock refurbishment is a key barrier to the achievement of this goal. No assessments exist to date of the viability of achieving deep emission cuts whilst overcoming this financial barrier. For this study, this viability has been assessed for Peabody, a large housing association operating in London. A model of energy use, carbon emissions and refurbishment costs has been developed for Peabody's existing stock. Various approaches to stock refurbishment up to 2030 were modelled, and outputs were assessed against four socio-economic scenarios, reflecting uncertainty about future fuel prices and efforts to mitigate climate change. Carbon emission reduction was assessed against the target set by the Greater London Authority (GLA) for 2025 for London in the London Climate Change Action Plan. The results indicate that the GLA's target can only be achieved through extensive stock refurbishment and only then against a background of substantial efforts to reduce UK carbon emissions. Despite assumptions of considerable financial support for refurbishment in the scenarios studied, the required measures require a significant increase in net expenditure and are therefore not financially viable for Peabody without extra funding. These findings point towards a future context where carbon emission reduction in housing is increasingly reliant on measures that may not provide net savings over the long term. The existence of a funding gap leads to the question of how it could be bridged. Two options for achieving this are explored: increasing rents or selling properties. The option of increasing rents is shown to have some potential in Peabody's case, as current rent levels are relatively low, but would require changes in Government policies on permitted rent increases.