The UK will fail to deliver on its 2050 net zero target without urgent action, the British Property Federation has warned.
Melanie Leech, chief executive of the BPF, said: “Failure to remove financial barriers to energy efficiency upgrades is a failure to recognise the huge task the country faces in reaching net zero.
“The government needs to recognise the importance of incentivising energy upgrades across both the commercial and residential property sectors in next week’s Budget. The chancellor has a clear opportunity to alleviate costs for households and encourage investment in measures that improve a property’s energy efficiency.”
The property industry lobby group has called on the chancellor to use next week’s Budget to remove financial barriers to retrofitting residential and commercial buildings.
The BPF also called for the removal of VAT on residential repairs and maintenance to incentivise homeowners to green their buildings, adding that the capital allowance system needs reform to drive energy efficiency investment decisions.
It is advocating for reform of the capital allowance system to to encourage investment in large-scale commercial retrofit projects. It proposes an alternative form of relief for capital expenditure that would provide full tax relief in one year and use a repayable tax credit system.
It added that business rates “must not be a barrier” to energy efficiency improvements.
The BPF said chancellor Jeremy Hunt must ensure that property owners are not penalised by rate rises immediately following environmental performance improvement works.
An estimated 58% of residential properties in England have an EPC rating of D or lower. The BPF said that less than a fifth of homeowners were planning to improve their property’s energy efficiency.
Commercial property faces a similar challenge, with an estimated 10% of buildings in London rated EPC F or G. Without significant improvements, half of inner London’s commercial stock will be classed as unlettable by 2027, according to BNP PRE research.
Recent research from the BPF, in collaboration with JLL, found that nine in 10 surveyed property organisations do not believe current government policy will deliver a net zero property sector by 2050.
See also: EG investigation: Landlords face £16bn EPC time bomb
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