Chancellor must harness the power of the property sector for net-zero challenge
- British Property Federation (BPF) calls for Government leadership and intervention to support decarbonisation of UK building stock that accounts for 25% of total carbon emissions
- Changes to REIT rules and a better incentives framework would unlock private capital investment into green energy infrastructure
The British Property Federation (“BPF”) has called on the Chancellor to set a clear long-term framework for the decarbonisation of the UK’s older building stock and deliver new green energy infrastructure in next week’s Budget announcement.
The UK’s commercial and residential building stock account for 25% of carbon emissions and the BPF has warned that the UK will not achieve its 2050 net-zero target unless the Government establishes a clear long-term policy framework and incentives to give investors the confidence to move forward with projects to futureproof older and inefficient buildings.
The BPF is calling for the introduction of a zero rate of VAT on residential repairs to support green retrofit projects as well as an upfront ‘green tax credit’ to support energy efficiency improvements to commercial properties. This is particularly important where viability is challenging, such as the upgrade of heritage buildings or social housing.
Ahead of the Budget, the BPF has also called for changes to REIT rules to allow property companies to invest more in renewable energy for their tenants. It has also highlighted the need for a better payment structure for all property companies selling surplus energy back to the grid to maximise the potential of the sector to deploy capital to renewables.
Melanie Leech, Chief Executive, British Property Federation said: “The property sector is a key partner for Government in the UK achieving its net-zero 2050 target.
“Ahead of the Budget, we urge the Chancellor to reinforce the Government’s ambition to be a world leader in tackling climate change by setting a clear policy framework for decarbonising the built environment. He must acknowledge the scale and complexity of the challenge to decarbonise our older building stock in particular and create tax and financing incentives that can unlock investment.
“There is huge potential to use our commercial buildings to generate renewable energy – but we need to make sure those companies that invest to generate power that is sold back to the grid are properly rewarded to do so.”
You can read the BPF’s 2024 Spring Budget representations in full here
