The UK’s newly restructured National Wealth Fund (NWF) has partnered with Barclays and Lloyds for a £1 billion initiative to enhance energy efficiency in social housing. As part of the NWF’s first major investment under Chancellor Rachel Reeves, Barclays and Lloyds each committed £500 million in loans, with NWF providing £750 million in guarantees to ensure stability for these loans. This funding targets carbon reduction in 3.8 million social properties, emphasising low-carbon heating and insulation improvements to reduce bills and improve comfort for residents.

The NWF’s backing aligns with the UK’s “warm homes” strategy, addressing the fact that 39% of social housing properties still fall below the recommended Energy Performance Certificate (EPC) rating of C. The UK government aims to upgrade all social housing stock to this standard by 2030, a target that will require an estimated £36 billion.

Chancellor Reeves emphasises that this initiative is only the beginning, intending to unlock substantial private investments and spur national economic growth. NWF’s CEO, John Flint, also highlighted that, by making financing more accessible for social housing providers, the partnership helps dismantle barriers to investment in the heat and buildings sector, a critical component of the UK’s net-zero transition.

With over £27 billion in capital, the NWF aims to amplify private investments that support the UK’s clean energy goals and growth industries. This partnership marks a pivotal step toward decarbonising the UK’s social housing sector, fostering sustainable growth while making homes warmer, more efficient, and affordable for low-income households.