Social Housing Decarbonisation Fund is the tip of the net-zero iceberg

Social housing providers can only rely on the Social Housing Decarbonisation Fund so far in their action towards net-zero.
Gayle Monk

Social housing providers can only rely on the Social Housing Decarbonisation Fund so far in their action towards net-zero. Gayle Monk, senior associate at Anthony Collins Solicitors, outlines the funding options that are available to social housing providers and the wider issues that they will need to take into account to decarbonise.

While a welcome development, the Social Housing Decarbonisation Fund (SHDF) is a mere drop in the ocean when it comes to the financing that housing providers require if they hope to hit their net-zero goals.

In fact, the first £160m instalment of the SHDF provides under 1% of the £104bn which Inside Housing estimates it could cost to retrofit and decarbonise the UK’s social housing stock. Though a total of £3.8bn is set to be committed to the SHDF over a 10-year period, it’s clear that social housing providers cannot rely solely on the Government fund in the move towards decarbonisation.

There is a need to move at pace, welcoming the SHDF but recognising an array of challenges that face the sector. So, the question stands – how best can providers plan for moving to net-zero?


The £104bn figure that has been identified as necessary for retrofitting existing housing stock shows the clear urgency of the SHDF, but more needs to be done by housing providers from their own or other external sources to reach even a small portion of the homes in need of work.

In addition, social housing providers face the unenviable task of balancing their medium-term net-zero priorities with recognising the more immediate social needs of current tenants. Regardless of whether some homes will be easier to retrofit than others, it is clear that there will be a considerable investment of time, money and effort to ensure all properties are fit for purpose.

Meanwhile, we know that the route to net-zero has significant social benefits to residents; more efficient homes means lower fuel bills, less ill-health and better living standards. Tenants’ wider needs will not be met without achieving net-zero.

While funding is a vital aspect of this plan, the need to recognise the interconnected environmental and social issues that are at play here is also crucial.

The complex needs of individual tenants and entire communities will always be central, and there needs to be a degree of pragmatism in approach about what can be achieved and the disruptive effect this could have on communities while work takes place, balancing the needs of tenants with the desire to have the greatest – and swiftest – impact on carbon emissions.

Focusing on homes that are void of tenants may be the most cost effective method to reach these net-zero targets with minimal disruption to tenants, but there will be situations where this is an insufficient response, especially given the need for speed.

And meanwhile, how exactly should this retrofit be funded?

Funding options

Government priorities are ever-changing and for providers, there is an urgency that they should identify decarbonisation targets for themselves and prioritise identifying their own funding outside of what the government provides.

The suitable funding options outside of the SHDF vary for each provider. Sustainability Linked Loans provide an alternative incentive alongside the SHDF, with the likes of Natwest committing £3bn of new funding by the end of 2022 to the housing sector. Yet, housing providers need to accept a certain level of responsibility outside of these options through their own investments into the future of their properties.

Providers should identify their own targets regardless of the policy landscape; the onus here is on providers to take immediate action to prioritise decarbonisation without reference exclusively to Government funding pots and the timetables attached to them.


With housing accounting for 15% of the UK’s carbon emissions, and social and affordable housing accounting for 16.7% of all homes, providers have a clear responsibility for their contributions to the journey to net-zero through their properties.

Climate change is the single most impactful issue humanity has ever faced and the SHDF is welcomed support, but the decarbonisation of the social housing sector is ultimately in the hands of providers.

Whether the funding comes from their own investment, the SHDF or Sustainability Linked Loans – and most likely through all of these plus other sources – the priority for providers should be the continued investment in net-zero, but placing tenants’ needs at the heart of the decarbonisation process.

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