Photography by Michael Leckie
The market for residential retrofit across the world is growing, with some estimates saying it will be worth around $65bn annually by 2030.
While this is only around a third of the overall retrofit market, these smaller retrofit projects, required almost everywhere, offer opportunities for smaller businesses, as much as for larger ones.
The need for residential retrofit is particularly acute in the UK, where the housing stock is among the oldest and worst insulated in Europe. So the country is a good illustration of the challenges, and of the opportunities for surveyors, recently boosted by RICS’ new residential retrofit standard.
It’s a lot of homes
According to the UK Parliament’s Business, Energy and Industrial Strategy Committee, the UK has 29m existing homes that need to be upgraded to low carbon heating systems by 2050. The current rate of construction in the UK means the present stock of homes is going to be around for a long time.
Decarbonising homes requires retrofits, and the committee estimates that an investment of about £250bn will be needed – the equivalent of about £9bn each year from the late 2020s to 2050.
The UK’s Climate Change Committee (CCC) says residential retrofits need to increase to a rate of 500,000 per year by 2025, and one million per year by 2030 to meet the UK’s net zero target.
And a lot of money
The scale of this means that we may need new models of financing. Delivering retrofit is likely to include a combination of public and private finance: grants and traditional loans alongside green finance and investment products.
I recently attended an event run by the UK Parliament’s Net Zero all-party group, launching a report on the retrofit finance challenge. This suggests that we will need neighbourhood- or city-wide coordination that aggregates smaller projects to create investable scale programmes. A similar approach is already underway with Local Climate Bonds in some UK council areas, but these are relatively small-scale. We need to be much more ambitious, both to achieve a level that investors can take seriously and to meet the decarbonisation challenge.
It's about liveability and affordability too
I was speaking at a recent conference for the UK’s Office for Place. The discussion ranged across many factors that make for places where people want to live. It reaffirmed that sustainability is a part of a wider set of requirements around healthy, affordable homes in neighbourhoods that help people thrive.
Beauty matters too: retrofit must be done so that it improves the fabric and the feel of an area. Good developments understand, work with and enhance existing historical, social and natural advantages. The housing crisis is a crisis of affordability as well as one of supply, and we should remember that the benefit of retrofit to individual households is in reduced energy bills and enhanced comfort.
A national problem needs local solutions
While national policy requires retrofit, these policies will be delivered locally, which means opportunities for surveying firms nationwide. For decarbonising heating, the choice of technology will depend on what's most feasible in an area: ground- or air-source heat pumps, district heating or solar.
Meanwhile, the best ways to insulate individual homes will depend on a range of factors. Specialist advice will be essential and the judgement of surveyors combining local and professional knowledge is essential.
Residential surveyors understand construction types and associated defects in their area. Unidentified or untreated defects, or measures that are unsuitable for the building can negate retrofit measures, or even leave properties with reduced energy efficiency.
Ensuring climate resilience is also important if an area is prone to flooding or ground shrinkage. Impartial, informed advice is the best way to avoid these issues.
Knowledge is key; standards are vital
With the typical home needing around £10,000 of work, homeowners need the best advice, and that means a physical survey by a professional. Research for the EU also highlighted that advisors had a vital role in helping people understand the overall retrofit potential for their home, when many homeowners initially focus on one or two improvements.
Providing this requires surveyors to have up-to-date knowledge and training. Retrofit costs will be a significant investment for many, but poor choices could cost far more long-term, so people need assurance that the advice they’re getting is well-founded, accurate and impartial. That’s where RICS’ new residential retrofit standard comes in.
It ensures that consumers carrying out retrofit upgrades to a residential property can get advice from skilled, regulated professionals. It also protects the public by upholding high standards in a growing market for advice. The RICS retrofit standard must also be delivered by a suitably qualified individual who can take a holistic and impartial approach towards the assessment.
“The UK has 29m existing homes that need to be upgraded to low carbon heating systems by 2050” Tina Paillet FRICS, RICS President
Assurance for lenders
Many homeowners will need to borrow for retrofit works. The standard has been developed with lenders, as well as energy professionals, surveyors, estate agents and academics. This ensures that RICS-based retrofit surveys can help owners unlock finance.
The financial sector, consumer groups and several public bodies also noted that the existing PAS 2035 standard is not always the best option for them when they require a simple assessment. While the RICS standard aligns with PAS 2035, it allows surveyors to deliver bespoke services to suit clients’ needs. If clients just require a survey and report, they can have that. If they require a more in-depth service, that’s fine too.
Surveying is continually adjusting to new demands, technologies and issues. The push for retrofit is the latest example, and with training, standards and professionalism, this 29m homes challenge is well within reach.
