Social housing decarbonisation boom: Billions in works as frameworks launch

Billions of pounds-worth of social housing decarbonisation work is moving through the pipeline as major frameworks come on stream.

One of the biggest deals has just begun with the Communities & Housing Investment Consortium (CHIC) appointing swathes of consultants, developers and contractors to its Asset Decarbonisation, Retrofit and Building Safety Solutions framework (Project ID: 23367828).

Also known as the CHIC Healthy Homes framework, the four-year deal covers work in three lots – consultancy, works & services, and digitisation – is only open to social housing providers and is expected to generate £2 billion in spending up to 2028.

The CHIC also operates an Optimised Retrofit Programme, which is a dynamic purchasing system to allow consultants to develop energy efficiency solutions with its members (Project ID: 22107031).

Improved outlook

After a poor year in 2023, Glenigan is forecasting a 7% rise in starts on underlying (work valued below £100 million) social housing construction work.

This is being boosted by more decarbonisation work that has become possible as housing associations benefit from stabilisation of material and labour costs that is producing an improved economic environment for housing associations and central government funding.

“Greater cost stability is expected to improve the viability of planned projects over the next two years,” says Glenigan economics director Allan Wilén.

A 10-year £3.8 billion social housing decarbonisation fund has been set up by central government and £1.4 billion will be invested between April 2023 and March 2025. This is helping fund swathes of smaller projects, such as a £6.5 million upgrade of social housing in Leicester by the city council (Project ID: 23244877).

Stock upgrade

Other major long-term agreements set up to help decarbonise social housing stock include the £1.5 billion Greener Futures Partnership Decarbonisation Framework (Project ID: 22437580).

The Greener Futures Partnership is comprised of five leading housing associations, Abri, Anchor, Home Group, Hyde and Sanctuary, which have a combined stock of more than 300,000 homes.

In the long term, the agreement, which started in May 2024, is expected to see spending of £1.5 billion and has also secured funding from the Social Housing Decarbonisation Fund including £40.4 million to retrofit over 5,000 homes.

Welsh spending

In Wales, Procurement for Housing has set up a £520 million decarbonisation & retrofit framework which will generate spending of £520 million up to Autumn 2027 with 50 contractors signed up (Project ID: 23090308).

Also in Wales, a £256.5 million energy efficiency & decarbonisation services framework has been set up by the Welsh Government (Project ID: 23044904).

As part of the agreement, which started in April, Centrica-owned British Gas has been awarded £200 million. The deal is a continuation of the Warm Homes Nest scheme, which began back in 2011, and will offer energy efficiency measures, including heat pumps and solar panels for low-income households and those in deprived communities to reduce their energy bills.

Social housing investment

With major central government funding, housing associations are set to roll out a major programme of decarbonisation work.