A billion pounds lighter: what yesterday’s Budget means for warm homes
Budgets often hide the important bits in the small print.
Yesterday was no different.
Chancellor John Healey spoke about help with bills. £100 for millions of homes this winter. An end to the gas standing charge. A longer VAT cut on electricity. All very welcome.
But the line about £1 billion coming out of the Warm Homes Plan was only mentioned in the papers published alongside it.
We’ve reviewed what’s changed, what didn’t, and what we think it means for homeowners, landlords, housing providers and the people who do the work.
In January, the Government set out its £15 billion Warm Homes Plan. The aim was to upgrade up to five million homes and lift up to a million families out of fuel poverty by 2030.
Yesterday, £1 billion of grant money was taken out of that plan to help pay for defence.
The Boiler Upgrade Scheme takes the biggest hit. It gets £400 million in 2027–28 rather than the £600 million planned in January, then rises with inflation. Over three years, that’s £720 million less for heat pumps.
- Heat networks lose £100 million this financial year.
- Grants for low-income homes lose around £180 million from 2028.
- The loans side is being trimmed too, with some money moved over to help first-time buyers. How much is not yet clear.
- The Government says most of the money for low-income households and social housing, handed out through councils and mayors, is protected. The extra £335 million for the Warm Homes: Local Grant and Social Housing Fund next year still stands.
Help with bills: welcome, but a plaster, not a cure
- Around 20 million homes in council tax bands A to D in England will get a one-off £100 energy payment this winter, with money set aside so Scotland and Wales can do the same.
- The cut to VAT on electricity runs on to July 2027, worth about £50 a year off the price cap.
- And the gas standing charge is being scrapped.
A £100 payment helps once. Loft insulation, a well-fitted heat pump or solar panels pay back every winter, year after year. When bills are propped up from the outside, the case for fixing the home itself looks weaker on paper, even though nothing about the home has changed.
With the standing charge gone, its cost moves onto the price of each unit of gas. That means every unit you don’t use is now worth a little more. Homes that waste less will gain the most. It’s a nudge in the right direction.
Heat pumps: still backed, smaller pot
The Government says it is still committed to heat pumps, and the grant each home can get through the Boiler Upgrade Scheme stays the same, at up to £9,000. What shrinks is the pot. Fewer grants, same size.
The Warm Homes Loan Scheme: spreading the cost
The day before the budget, on 27 October, the Government opened its Warm Homes Loan Scheme. Homeowners anywhere in the UK can borrow to pay for a heat pump, solar panels, a home battery and more, with nothing to pay upfront.
Ten lenders are taking part at the start. Some offer loans with no interest at all, and some give up to 30 years to pay back. The Government says rates are up to 5% lower than a typical loan.
The Government’s own example: borrow £10,000 over seven years and you could save up to £285 a year on repayments compared with a normal loan today.
Upgrade – Most you can borrow
- Ground source heat pump – £35,000
- Air source heat pump – £20,000
- Biomass boiler – £20,000
- Solar panels – £15,000
- Home battery – £15,000
- Air-to-air heat pump – £10,000 (once MCS certification is available)
- Heat network connection – £7,500
You can pair a loan with a Boiler Upgrade Scheme grant of up to £9,000 (or Home Energy Scotland support in Scotland). And every job, apart from heat network connections, must be fitted by an MCS-certified installer, so good standards come built in.
The VAT clock is ticking
Right now, qualifying energy-saving work in homes carries 0% VAT. That ends on 31 March 2027. From 1 April, it goes back to 5%. (Heat batteries are being added to the list, which is welcome.)
Five per cent may not sound like much. On a £12,000 solar project, it’s £600.
Surveys, assessments and design all take time, so if you’re weighing up insulation, solar or a heat pump, now is the time to start the conversation, not March.
Landlords, councils and housing providers
There’s an immediate £100 million top-up to the Warm Homes: Social Housing Fund, aimed at solar panels. From March, the Future Homes Standard comes in, raising the bar for how well new homes in England must perform.
For landlords, the direction of travel hasn’t changed: standards are rising, and the sooner you know where your homes stand, the more choice you have.
For councils and housing providers, the funding you rely on is largely intact. The challenge now is turning it into warm homes, well and on time.
What we think
The word we keep hearing across the industry is certainty.
The IAAF put it well yesterday: the supply chain needs “certainty, not another change in direction.” We agree. It’s ten months since the Warm Homes Plan was published, and firms are still waiting for clear, workable detail. Every change of course makes businesses think twice before they hire, train or invest. And in the end, it’s families in cold, damp homes who pay for that hesitation.
Here’s what hasn’t changed. Britain’s homes still leak heat. Bills are still too high. The 2050 targets still stand, and the Budget backed them again. The need is just as big as it was last week. What’s changed is that the money left on the table has to work harder.
That means getting the basics right: assess each home properly, fit the right measures in the right order, and do the job well the first time. It’s what we do every day, and a tighter budget only makes it matter more.
What to do now
- If you own your home, check your council tax band to see if the £100 payment is coming your way. If you’ve been thinking about upgrades, get a proper assessment done well before April, and take a look at the new Warm Homes Loan Scheme. Talk to us about any upgrades you’re thinking about: hello@ecoapproach.co.uk
- If you’re a landlord, find out where your homes stand on energy performance today, so new standards never take you by surprise. Get a MEES report and action plan for the fastest, cheapest and least disruptive route to compliance; contact us on: mees@ecoapproach.co.uk
- If you’re a council or housing provider, the money for your programmes is largely protected. Now is the time to plan delivery with partners you trust. Contact us to find out how we can improve your property portfolio’s energy efficiency and your residents’ homes with our complete assessment-to-installation service: hello@ecoapproach.co.uk
