The Warm Homes Plan: Key Takeaways

Nimoy Kher analyses the Government's Warm Homes Plan, picking out the key parts of the plan and what they mean for local authorities.

On 21 January 2026 the Government published the Warm Homes Plan – a sweeping £15 billion programme to upgrade Britain’s homes, cut bills, grow clean energy markets, and accelerate the shift away from fossil-fuel heating. It is the largest home-upgrade investment in UK history. In this article, we take you through the key parts of the plan that you should know.

WARM HOMES PLANS – THE HEADLINES:

• £15bn public investment to 2030 to upgrade 5 million homes.
• Plan aims to lift 1 million households out of fuel poverty.
• Grants and zero/low‑interest loans for solar, heat pumps, batteries, insulation.
• Future Homes Standard (Q1 2026): all new homes must have solar and clean heating as standard.
• Landlord regulation: private landlords must reach new minimum energy‑efficiency standards by 2030.
• District heating push: heat network zoning from 2026, major capital funding, and Ofgem becoming the heat‑network regulator.
• Warm Homes Agency: new body coordinating delivery, consumer protection and local‑authority partnership.
• Strong focus on UK supply chain, UK‑made heat pumps, and 180,000 new jobs.

For our clients, this is a major signal. The Government wants a mass‑market clean‑heat sector and expects businesses, investors and local authorities to scale accordingly.

WHY THE PLAN EXISTS – THE GOVERNMENT’S DIAGNOSIS:

The Warm Homes Plan clearly articulates the key drivers:

• The UK is chronically exposed to gas price shocks.
• Households owe over £4bn to suppliers.
• Fuel poverty is widespread, especially in the private rented sector.
• UK homes are some of the oldest and least efficient in Europe.
• Buildings account for 21% of UK territorial emissions, mostly from heating.

The Government’s solution to these issues is to make electrified heating mainstream, slash the cost of solar and storage, and remove barriers – planning, grid, finance, quality, consumer confidence – that have held the market back.

KEY PILLARS OF THE WARM HOMES PLAN

Boiler Upgrade Scheme (BUS) – now increased to £2.7bn to 2030

• Up to £7,500 grant for customers installing heat pumps.
• Grants now also cover air‑to‑air heat pumps and heat batteries.
• Strong messaging that heat pumps are the primary clean-heat technology for most homes.
• Aiming for 450,000 installations per year by 2030

Zero and low‑interest loans

• £2bn government backing for consumer loans, delivered through lenders.
• For solar, batteries, heat pumps, and insulation.
• Government intends these to be mass‑market: expect simple products, standardised underwriting, and support from the new Warm Homes Agency.

Warm Homes Fund (£5bn)

This is the big strategic investment pot. It will:

• Support bulk procurement, aggregated delivery, and local-authority programmes.
• Offer loans or equity for LAs, social landlords and energy‑services providers.
• Support energy‑as‑a‑service models (third‑party ownership of heat pumps, solar, batteries).
• Invest in UK manufacturing and supply chains.

This is a major announcement – it’s a public signal that government wants private capital to scale clean‑heat infrastructure the way it scaled renewables.

Direct support for low‑income households

• £5bn set aside for free upgrades: solar, batteries, insulation, heat pumps.
• Delivered via local authorities and housing associations.
• Whole‑street and neighbourhood retrofit encouraged.
• Warm Home Discount expanded to nearly 6 million homes.

This matters for clients because LAs and RPs will commission large retrofit programmes. Lots of opportunities for contractors, funders, and integrated delivery partners.

Landlord obligations (private rented sector and social housing)

Private rented sector

• By October 2030, PRS homes must meet EPC Band C (or equivalent) on two new metrics.
• £10k cost cap per property (with exemptions for low‑value homes).
• Landlords can use grants and loans.
• Improvements made from October 2025 will count towards the 2030 cost cap.

This brings the private rented sector firmly into the clean‑heat policy space. We expect big compliance programmes in 2026 – 2030.

Social housing

• Similar standards proposed, subject to final consultation.
• Warm Homes Fund and National Wealth Fund already targeting Registered Providers of social housing.

For developers and investors who work with social landlords or private rental portfolios, compliance‑driven capex will accelerate.

All new homes to have solar & clean heating (from 2026)

The Future Homes Standard goes live in Q1 2026:

• Solar PV mandatory on new homes.
• Clean heat (expected to be heat pumps) mandatory.
• High fabric efficiency.

For developers and housebuilders, this is a major shift – but also provides certainty. For investors, it strengthens long‑term demand for heat-pump and solar manufacturing capacity.

DISTRICT HEATING

The plan relies heavily on heat networks.

Targets and regulation

• Heat networks expected to meet 7% of heat demand by 2035.
• Zoning becomes law in 2026.
• Ofgem becomes heat‑network regulator from 2026, with rules on pricing, resilience, outages, complaints, etc.
• Aim is for networked heat to be able to compete fairly with gas on price.

Funding and investment

• £1bn for heat networks in cities and urban areas.
• Green Heat Network Fund: £195m per year to 2029/30.
• National Wealth Fund backing for major projects.

Why this matters

This creates a large, long‑term pipeline for investors and developers:

• Cities will need heat‑mapping, zoning, anchor loads, and masterplans.
• LAs may require new developments to connect.
• Retrofits of flats and estates will increasingly choose networks where viable.
• Utilities and infrastructure investors have a clear route to scale.

The plan specifically states government wants the UK to be “one of the fastest-growing heat‑network markets in Europe.”

SUPPLY CHAIN, SKILLS AND MANUFACTURING

Government wants to avoid dependency on imported systems. Measures include:

• Target: 70% of UK heat pumps installed in 2035 to be UK‑made.
• £90m for UK heat‑pump manufacturing.
• £21m Heat Training Grant and £8m Warm Homes Skills Programme.
• Support for innovation in compact systems, hybrid systems, multi‑tech packages, and digital installation tools.

This is a clear signal for manufacturers and training providers to invest.

CONSUMER PROTECTION OVERHAUL

The plan acknowledges long‑standing issues: poor‑quality installations, fragmented oversight, unclear redress routes.

Fixes include:

• MCS to become the sole certification scheme for clean‑heat measures under government programmes.
• Oversight brought closer to government through the Warm Homes Agency.
• Clearer redress pathways and extended guarantees.
• 100% audits of external wall insulation installed under ECO4 and GBIS (with remediation paid for by installers).
• Stronger installer accountability and fewer certification bodies.

For developers, investors and LAs, this should reduce risk and increase trust in supply chains.

DELIVERY ARCHITECTURE: HOW THE PLAN GETS BUILT

Warm Homes Agency – the new centre of gravity

A new public body will:

• Bring together functions from Salix, DESNZ, and parts of Ofgem.
• Be the “front door” for home‑upgrade advice and programmes.
• Oversee consumer protection and installation quality.
• Support LAs and housing providers with area‑based schemes.
• Use data and AI to target fuel‑poor homes and track delivery.

For the market, having a single coordinating body should reduce fragmentation that has plagued retrofit schemes for years.

Local delivery and area‑based planning

The Government wants retrofit and clean‑heat deployment planned at local scale:

• Mayors and LAs given bigger roles.
• Alignment with Local Area Energy Plans and Regional Energy Strategy Plans.
• DNOs expected to coordinate grid upgrades with LA retrofit rollouts.
• Warm Homes Fund expected to support LA‑led aggregation and procurement.

WHAT ALL THIS MEANS FOR OUR CLIENTS

Developers and Housebuilders

• Solar and heat pumps are now standard from 2026.
• Expect planning policy and building control to align quickly.
• District heating likely in dense sites; heat pumps in lower density.
• Potential to access Warm Homes Fund for mixed‑tenure and estate‑scale deployment.

Funds and Institutional Investors

• £15bn public capital is expressly designed to crowd-in private finance.
• Strong pipeline: heat networks, solar, batteries, heat‑pump manufacturing, retrofit aggregation, LA frameworks.
• Clarity on landlord standards creates investment opportunities in PRS and social housing upgrades.
• Models like energy‑as‑a‑service are now explicitly encouraged.

Utilities, ESCOs, and EPC Contractors

• Massive opportunities in heat-pump deployment, solar, insulation, and battery programmes.
• Heat‑network growth will require large developers/operators.
• Smart meters and flexibility services become commercially important as households electrify.

Local Authorities and Housing Associations

• Significant capital for low‑income upgrades.
• Support for area‑based retrofit, bulk procurement, and local energy planning.
• Expect to be core partners in heat‑network zoning and delivery.
• Ability to blend Warm Homes Fund, BUS, and borrowing.

CLOSING THOUGHTS

The Warm Homes Plan is a massive shift. It signals government’s intention to move home energy into a new phase: mass electrification, mass retrofit, and mass deployment of distributed generation and storage. For clients in the energy, development, utilities and investment sectors, the message is clear: this is a growth market – with regulation, capital, and delivery structures all pointing in the same direction.

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