How does the Green Homes Grant Scheme work?

Read on for our Q&A with Lucian Cook, Head of UK Residential Research at Savills, to find out everything you need to know about the Government’s plan to breathe life into the economy and make our houses greener at the same time.

The Chancellor has just announced a new Green Homes Grant. What does it mean?

The new Green Homes Grant is really exciting. It will mean that homeowners, whether they’re owner-occupiers or landlords, will be able to apply for grant aid of up to £5,000 so that they can improve the energy efficiency of their home.

What are the key benefits of the scheme?

I think it should mean that people more readily have an incentive to undertake those improvements to their home that they have put off. The benefit, of course, for the consumer, is that it should help reduce their energy bills and in some circumstances increase the value of their home at the same time.

Who can get a Green Homes Grant and how?

At the moment, we don't know the full eligibility criteria. It looks like it is going to be a grant available to homeowners whether they're owner occupiers or landlords. It will be issued, we think, via a voucher system, which you will apply for once you've got a quote for the relevant works from an accredited supplier.

What type of home improvements can be funded by the grant?

We’re yet to see exactly what type of improvements can be funded, it will be things like loft insulation, but equally there's some indication that it might be some bigger ticket items so things like replacing your existing boiler with something which is much more energy-efficient.

What about people on a low income. What does this mean for them?

We understand that the scheme's slightly different for those people on a low income: they will be able to get a higher amount of grant. Of course, for those people, we often know they are living in some of the least energy-efficient homes. So the benefit for them, I think, will be greater because it should result in a greater saving to their energy bills.

Will it add to the value of people’s homes and will it reduce their energy bills?

Certainly it should reduce people's energy bills. That's exactly what it's designed to do. But what we do know from our analysis is that the most energy-efficient homes in bands A and B of the energy-efficiency rating carry a ten to 11% premium above the average home which would be in band D.

Can landlords get access to this grant?

Yes. Our understanding is that landlords will also be able to access the grant through the normal application process alongside owner occupiers.

What about people living in rented accommodation?

At the moment, we think that the grant has to be applied for by the homeowner and the landlord, but of course, the tenant can have discussions with that landlord and encourage them to do it. There's a bit of a win-win here if landlords undertake the work the tenant requests.

Is there an end date to the scheme and will the government launch more grants like this in the future?

I'm not aware of when the end date is expected to be for this scheme. I suspect it is the sign of things to come. I think we're going to see a much greater focus on the energy-efficiency of our homes, particularly given the extent to which they contribute to carbon emissions and the Government’s desire to get to zero carbon by 2050.

How will the Green Homes grant benefit small businesses?

Often you find it's the small businesses who are undertaking energy-efficient works on behalf of the homeowners and so for them, it should be a boost. It should increase demand for their services, which is a good thing, both for their bottom line, but also for their employees. It is going to require us to build up more skills in this area.

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.