NatWest and National Wealth Fund Invest £500m to Boost Energy Efficiency in Social Housing

In a significant move to modernise the UK’s social housing stock, the National Wealth Fund (NWF) has partnered with NatWest Group to roll out £500 million in new loans to retrofit social housing with energy-efficient upgrades and onsite renewables. Announced on April 1, this initiative channels £400 million in government-backed guarantees, ensuring that 80% of each loan issued by NatWest is secured under the scheme.

The objective? To transform outdated housing into sustainable, cost-efficient homes. These loans will directly support critical retrofit measures, including energy-efficient heating and lighting, insulation, renewable energy systems, advanced ventilation, and heating controls. Additionally, resilience improvements and biodiversity-focused modifications are part of the funding scope.

With nearly 1,600 registered providers managing social housing in the UK, the scale of the challenge is immense. Research from the National Housing Federation underscores the urgency—£36 billion is needed to decarbonise housing association properties fully.

Minister for Energy Consumers, Miatta Fahnbulleh, said: “As we continue at pace with the rollout of our Warm Homes Plan, this new agreement is another significant boost for delivering warmer homes and lower bills for social tenants.

“This follows our recent allocation of £1.8bn to local authorities and social housing providers across England to deliver upgrades like insulation, solar panels and heat pumps, helping people save energy and money off their bills.”

The NWF has already taken strides in this direction, having previously teamed up with Barclays UK Corporate Bank and Lloyds Banking Group on a £1 billion initiative for energy-efficient social housing upgrades.

This latest funding round accelerates those efforts, focusing on reducing carbon footprints, improving insulation, and adopting low-carbon heating systems. The result? Warmer homes, lower energy bills, and a tangible impact on the UK’s net-zero ambitions.

The Government estimates that the UK has 4.8 million social housing properties, with 2.9 million owned by private registered providers. Alarmingly, 28% of these homes have an EPC rating of D or worse, and 10% fail to meet the Decent Homes Standard—a stark indicator of the pressing need for energy upgrades.

Compounding this issue is a longstanding energy affordability crisis. A recent University of Edinburgh study found that between 2011 and 2019, low-income households paid 10–20% more for electricity and gas than wealthier households—a burden affecting private renters, homeowners, and social housing tenants alike.

Established in July last year, the National Wealth Fund plays a pivotal role in the UK’s green investment landscape, with £7.3 billion already allocated through the UK Infrastructure Bank. It is chaired by the Green Finance Institute (GFI). It works alongside a high-profile task force featuring former Bank of England Governor Mark Carney, Barclays CEO C.S. Venkatakrishnan, Aviva CEO Dame Amanda Blanc, and significant institutional investors.

This task force is actively identifying priority investment areas. It will present its recommendations to Chancellor Rachel Reeves and Energy Security and Net Zero Secretary Ed Miliband.

With this latest funding injection, the NWF’s total commitment to social housing retrofits now stands at £1.3 billion, unlocking £1.65 billion in lending through loan guarantees—a substantial step toward making UK housing greener, warmer, and more energy-efficient.

Commenting on the announcement, NatWest Group’s chief executive Paul Thwaite said: “NatWest continues to be a leading lender to the UK social housing sector, and last month we upgraded our lending ambition to £7.5bn as demand continues to grow. Working with the National Wealth Fund on deploying £500m of new loans means we can help retrofit more social homes across the UK at pace – supporting those who need it most.”