Advice For Estate Agents As Policy Uncertainty Risks Impacting Housing Market

Malcolm Farrow

Confusion over the government’s plans to transition rural properties to greener heating systems, combined with rising mortgages costs, risks putting off potential homebuyers, according to a registration body for off-grid heating technicians.

The trade association OFTEC says that it has received several enquiries in recent weeks from estate agents and house sellers asking for advice on the government’s proposals to transition rural properties on fossil fuel heating systems onto renewable technologies and whether this will put off potential house buyers.

In response, they have sharing the below information to clarify what the government has outlined and help address some of the confusion.

OFTEC says that there are an estimated 4 million properties across the UK who are not connected to the mains gas grid and use alternative fuels sources including oil heating, LPG or electric storage heaters.

In 2021 the government published its Heat and Buildings Strategy which proposed phasing out the installation of new fossil fuel heating systems in homes from 2026. In most cases, these properties will be expected to install a heat pump when their existing boiler stops working. The announcement was part of the UK’s ambition to achieve net zero by 2050.

Whilst for some properties transitioning to a heat pump is a sensible choice, rural homes are often more difficult as they have low energy efficiency and would require costly and disruptive renovations for the technology to work effectively. This could include the reintroduction of a hot water tank, new radiators and changes to the pipes.

As a result, the trade association OFTEC has reported an increase in enquires from homebuyers concerned about purchasing a rural property in case they face additional costs to switch to a greener heating system.

In response, OFTEC has issued the following guidance to estate agents and landlords to clarify some of the misconceptions house buyers have:

+ These are currently only proposals and we are still in the consultation stage awaiting a response from the government. With a general election next year, the 2026 date is very optimistic.

+ There is no suggestion homes with fossil fuel heating systems, such as oil, will have to remove or replace their existing working boiler. The proposals only focus on the installation of new heating systems when the existing one breaks down. This means, after 2026, you can continue to use an existing oil boiler.

+ Alternative solutions are being put forward. Around 150 oil heated properties across the UK have successfully transitioned to a renewable liquid fuel called Hydrotreated Vegetable Oil (HVO) as part of an industry demonstration project. The fuel reduces emissions by 88% and works in the existing boiler and tank following a minor low-cost modification to the boiler. There is increasing support from rural MPs for this solution who are seeking to secure an amendment to the government’s Energy Bill.

The guidance comes as a new ONS survey reveals that two in three adults (65%) are cutting back on their spending in response to the cost-of-living crisis. With the recent 0.5% increase in interest rates pushing up mortgages, house buyers are increasingly on the lookout for any potential additional costs once they move into a new property.

Malcolm Farrow, head of public affairs at OFTEC, commented: “As the cost-of-living crisis collides with the UK’s net zero ambitions, we’re hearing from more house buyers concerned about how the government’s energy plans will affect them if they purchase a rural property. It’s important everyone has the facts so they can make an informed decision. Unfortunately, there seems to be a lot of confusion. Quite simply, there is no suggestion at all that homes with fossil fuel heating, such as oil, will have to remove their existing boilers.

“What is true is that in order to meet our net zero targets, every property in the UK, including those on mains gas, will have to transition to greener heating systems in the future. Nearly two years ago, the government set out its proposals for how this can be achieved and what we need now is some clarity to put to bed the uncertainty.

“We believe that for the government’s net zero ambitions to succeed, the proposals must be fair. The focus must be on delivering green heating solutions which are practical to install and, more importantly, affordable to avoid putting any unnecessary burden on one group of homeowners. Rural properties are particularly challenging because they tend to be older and it isn’t always realistic to make the kind of changes needed to install some technologies, like a heat pump, which would require disruptive changes to the fabric of the building.

“That’s why for oil homes, we’re campaigning to secure support for renewable liquid fuels such as HVO as homeowners could keep their boiler and simply switch the fuel they are using. We believe this is the most practical solution and we’re working to secure support from the government for a wider rollout.”

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