Who Pays?


Clearly there must be a cost for carrying out insulation and energy efficiency work but where do the bills fall?

GOVERNMENT:  A minimal loss A legal action and discussion with local authorities as to how this is carried out

TREASURY:  A minimal loss.  Current predictions of how to insulate UK housing vary widely between over £150bi to over £400bi over the next 30 years.  This is the elephant in the room for funding Net Zero for the whole economomy.   However, under the proposal shown here, the Treasury will take in a gain from the buying of equipment and items for insulation through VAT.  An initial problem is that some people who recently (within the last 3-5 years) may see their property drop in value suddenly and they find they may have to take out a further ‘Green Deal’ type mortgage to pay for the house insulation.  This will take its ‘value’ up to the price that the buyer had originally bought it at (as advised by the ‘valuer’ prior to the Government action).    This may actually have political problems so please see that section.  Economic models would be needed for housing of different types and areas. See Examples 2 page. This will be a case for ‘oiling the wheels’ , avoiding these problems, and not lose votes.

LOCAL AUTHORITIES:  Minimal loss.  They would demand the assessments of the insulation that would be needed.  It should be carried out commercially at the payment of the seller or buyer.  This is similar to other things organised by the LA e.g. design acceptance, sound insulation, fire standards, engineering.  The council keeps a copy of the final document stating that the work has been done to a good standard.

LOCAL ASSESSMENT COMPANY:  Gain. These are the commercial companies that will advise the house buyer what exactly must be done to the house to fulfil insulation regulations.  The Government may decide that, like the EPC, this must be paid by the seller before being put on the market. 

FIRST TIME BUYER:  Major gain.   A house is bought much cheaper but with a mortgage that pays for insulation.  The gain is continuous income from lower utility bills compared to buying the house at the higher price and have no money left to insulate.  The value of the house will rise to that of a fully insulated house.  See Examples 1 and 2They are one of the major groups actually paying for the insulation to housing in that they borrow the money needed  and are paying off that debt. However they see no personal loss from their income. 

SELLER OF OLDER HOUSES WITH POOR INSULATION.  Minor loss gradually fading.  This is because they can buy another poorly insulated house for the same price, get a mortgage that will pay for the insulation, live in a warm house, and find that if they want to sell again the value of the house will to an increasing degree repay the insulation mortgage capital debt. As time goes by a larger and larger part of the original debt  has been paid.  See Examples 1 and 2. They are one of the major groups actually paying for the insulation to housing in that they borrow the money needed  and are paying off that debt. However they see no personal loss from their income. 

MORTGAGE Co: Minimal change.  Even though many people will not need a mortgage, those that do for the insulation may balance that out.  Risks must be considered.  See Political sect

FINANCIAL COMPANIES. Gain. This is mainly because risks are taken and insurance needed, plus investment required in the development of SMEs  that will be able to carry out much of the work.  Developers of land that they already own into domestic housing will want to include many of the demands in the Government Action or they will be offered a lower bid by potential buyers.  With land that the developers do not already own they will bid less for it and so there is a loss by land owners.  There are large numbers of mortgaged houses that will fall in value such that a risk will appear to the mortgage company (e.g. banks).   Many of these houses, if the mortgagee stops  paying  the mortgage, would need to be sold off under the rights of the mortgage company and hence a loss potentially appear in their finances.  Some kind of guarantee from a finance company or a separate guarantee from the Treasury would be needed in order to avoid the risk. 

PROFESSIONAL VALUERS: Minor gain.  They would be paid to find out the costs and gains of insulation.  This is  information needed by the Mortgage Company in order to consider whether to give a mortgage as they ultimate value of the property must be high enough.

RETROFITTERS: Major gain.  With 300,000 buyers annually the retrofitters will do well.  Work takes 2-3 weeks for wall insulation (but a lot of dust).  Also buyers may ask for other work (roof, electrics) to be carried out at the same time.  We will probably see SMEs (Small and Medium Enterprises) start up to organise work from a wide distances.  Often PV panels and MHRV may be demanded by the LA advisor and can be done separately.  ASHPs are of little ongoing economic value in a poorly insulated house however, because they cause low CO2 emissions they may become required by regulations etc

SUPPLIERS: Major gain.  Insulated plasterboard, wood, glass fibre insulation. Also the technical items of ASHPs, MVHR  and PV

TECHNICAL  COLLEGES. Gain. Currently most of the methods needed by the people taking on the work is well described but students passing through the colleges turn down the courses in retrofitting as if there was nothing in it for them.  This would change e.g. see the Retrofitting Academy (retrofitacademy.com).

COST OF WORK PAID TO THE TRAINED COMPANY: For a terraced or semi- property getting wall insulation, PV panels, ASHP, insulation and MVHR would come to around £20,000.  Good loft insulation and lightbulb changing a good idea.  Detached properties would cost more for the procedure to be carried out, with more air ducting and plumbing needed.   Partly due to inadequate numbers of new builds and rising demographic changes, inflation of house prices has been around 5% pa for several years but with large rises and falls.    During some periods we have seen this almost wipe out house price mortgage debts (late 1970s) but usually acting slowly.  This means that mortgage interests being often less than inflation rates they also ‘inflate away’ the personal cost of the mortgage.  Similarly people willing to take out a mortgage debt for insulation will see the house market price rise on the full value of the house and so the small insulation seeming to ‘inflate away’ if inflation is higher than the mortgage interest rate.   So past inflation and oncoming inflation may act to apparently decrease the debt of the mortgage with respect to ongoing family income. So the cost of work paid to the trained retrofit company would initially be by their invoices, but as time passes it will seem to be a progressively lower debt to the mortgage company. 


  1. Fall in illness and decrease in NHS costs 
  2. Due to simply feeling warmer in the owner’s house
  3. CO2 emissions dropping
  4. Fall in the effects that may be seen on climate change 
  5. Fall in mould, damp and breakdown of household items


  1. People leaving the housing market for good.  Due to death, living in USA for good etc
  2. People that do not save enough energy when house is fully insulated
  3. New Owners that still have a large debt to pay on their previous mortgage and yet going into a pensionable age.  i.e. the person buying their uninsulated house will not give them enough to cover their debts.  See the politics section and discuss with Mortgage Companies. 
  4. Landowners may find that housebuilding developers offer less for the land.
  5.  Suppliers of domestic oil, gas, and electricity (non-sustainable) will see their incomes drop progressively. 

You can see how as the energy efficiency up-grades were  less and less funded by subsidies since 2014.

Clearly they had made a difference e.g. PV panels became suddenly worthwhile in about 2009, but the payment system for them was changed in 2014

Academic References

Gooding L, Gul MS. Enabling a self-sufficient energy efficient retrofit services sector future: A qualitative study. Energy Build. 2017;156:306-314.

Shatat M, Tetlow D, Riffat S. The retrofitting of an old style semi-detached house for energy reduction and carbon savings under the UK climate. Int J Low-Carbon Technol 2015;10(2):119-130.

Owen A, Mitchell G, Gouldson A. Unseen influence-The role of low carbon retrofit advisers and installers in the adoption and use of domestic energy technology. Energy Policy. 2014;73:169-179

Jones P, Lannon S, Patterson J. Retrofitting existing housing: How far, how much? Build Res Inf. 2013;41(5):532- 550.

Academic and Technical Assessment 

Healthcare effects of poor domestic heating appearing as costs to the NHS, life expectancy, ability to go to work. 

Income advantages (as profit) seen by a developer for insulating different types of domestic housing.  

Cost and advantages using data already collected for various specific factors e.g. heat pumps, PV panels, mechanical heat recovery with ventilation.    

The current numbers of fully trained insulating companies or staff is very low so a survey of different technical colleges and the setting up of a system for assessing them, should the demand rise quickly.

 Investigation of Further Education using various ways to create large numbers of insulation staff e.g. like nurses (stipends during training), on line training and CITB type SSSTS training, or apprenticeships. 

Reports from current finance groups for Net Zero to indicate how mortgage companies would gain or lose money but rather may gain through investment in the industry.

 Academic investigation of how domestic house owners would be affected by this process: many may be extremely worried but others simply aching to take part.

 How this anxiety may be associated with age, income, and uncertainty of costs. 

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