Anna caught up Jon Daley, who she (not very) jokingly refer to as ‘the Martin Lewis of social and sustainable housing’ because he knows so much about these socially critical topics. He’s also Head of Sustainability at Asset Manager G2M.
For context, Jon and Anna agree on a lot of things, including that the value of ideas shared increases exponentially, and that collective effort beyond building design is essential for achieving the environmental and social outcomes needed in UK housing pre-2050.
Topics we covered on the pod included:
What is needed in order to upgrade the huge proportion (80%) of UK homes that we use in 2050 which already exist
Navigating key regulatory changes, standards and bodies from Rental Reform to COP to the UK Green Finance Strategy to ISSB
Navigating funding opportunities such as ECO and the Social Housing Decarbonisation Fund
Listen in here: bit.ly/returnpropertypod
This transcript is AI generated. Please excuse any typos. If you’d like to see a human-edited version, please reach out to Katy@GreenResi.com
[Anna Clare Harper]
Hi, and welcome to the Return Property and Investment Podcast. I'm Anna, and I'm delighted to be joined by Jon Daley, who is Head of Sustainability at G2M, and I think of him as kind of the Martin Lewis of social housing and sustainability. So welcome to the podcast, John.
[Jon Daley]
Hello, Anna. Thank you for them kind words.
[Anna Clare Harper]
Yes, exactly. So we share a couple of views. We talk at length about sustainability and housing, and we share a couple of views that I thought was worth highlighting up front.
Firstly, that the value of ideas shared increases exponentially, and there is huge value in sharing ideas and partnerships within the housing sector. And secondly, that improving existing homes is really critical for all of the environmental, social and governance outcomes that we need in the UK, in particular net zero, but that collective effort is needed beyond just new build. So I thought I'd just highlight that.
This is a couple of the topics that we talk about offline. But today we're going to talk about a range of topics relating to sustainability. So just to get started, a key facet of sustainability, John, is that it's future focused.
So looking ahead to the homes of 2050, what are the elements that we need to incorporate into both new and existing homes to ensure sustainability, whether that's around modern methods of construction or adherence to building regulations?
[Jon Daley]
Yeah, there's absolutely loads. I already feel like Martin Lewis already with a question like that. So yeah, there's loads out there at the moment.
I think the first thing we've all got to be thinking about, especially in 2025 onwards, are the current standards that are coming in. So future home standards. We're headed a lot more around this, looking at alternative heating sources, looking at renewables, you know, the provision of ventilation, prevention of overheating, and of course all the benefits that provide residents with more sustainable homes.
And we'll learn that already from our retrofit as well. Look alongside that as well, looking towards homes of 2050, we've got to be like aware and very mindful of sustainable housing design itself. Because when we think about it with homes, we've got to think about the audiences that we send.
So from the ONS, for instance, the Office of National Statistics, you know, we look at the population will increase to over 70 million by 2050. And again, in terms of its usage, it's going to be made up potentially more so of the greying population and young families. You've got to think of how sustainable homes can be given the audience that we've got.
But it doesn't just stop there. There's so much more to it in the fact that we've got to be aware of carbon offsetting. So looking at things like biodiversity net gain, make sure that we've got, you know, real good implementation of green spaces for a number of different factors.
And the first one's all about environment and carbon reduction. But at the same time as we've got to be aware of increased flood defences and of course like personal effects like mental health. Because again, people really enjoy green spaces.
But on top of that as well, bring that all together, bring it as good sense of community sustainability. And of course, as well, an affordable community too. So we're looking at reducing our resources, but also as well, ensuring that community is sustainable in living there.
So again, that's better resident resilience, you know, better mental health, and again, prevention of health issues. Because again, there's a massive link between housing and health and what can you do as housing providers to provide environment. So it's really, really important.
But yeah, loads to go on in relation to 2050 sustainability in housing.
[Anna Clare Harper]
You have opened a few cans of worms there.
[Jon Daley]
No, I don't know if that's a good thing or a bad thing.
[Anna Clare Harper]
I think part of it is just helping to navigate some of these things. So right now I am in the US and we have different set of problems in the US versus in the UK in terms of the housing stock. And retrofit partly because we have so many old homes, really old homes in the UK.
And as we know, a huge proportion of UK homes, over 80% of the homes that we use in 2050 already exist. So how can we address the need for retrofitting these existing homes?
[Jon Daley]
So that's a really interesting statistic at the start. I come from the Energy Technology Institute. So we need 34 million homes by 2050 and 80% of them homes that we currently have need to exist by 2050.
So take you said before the introduction on it and the fact of we can't just build our way out. It is a very important aspect of it, but we have to ensure that we keep our home sustainable. But there's a lot to it.
I mean, the first foremost thing I think that we need is we need to have an accurate understanding of the homes that we have. So some ONS Office of National Statistics figures there show 60% of EPCs in England and 55% of EPCs in Wales, obviously, you know, applied to the country. Again, there's a big depth of information, 40% in England and 45% in Wales.
Because again, remember, EPCs are only really required at sale or at least. So we need to understand that, you know, that information first and foremost, and again, to have up to date information. We're seeing more so on that as we go ahead with things like your funded works and of course, further retrofit.
But they're both challenges in themselves. So for instance, the big one there for us as well as we understand as a country that we need the funding, plain and simple, there needs to be investment. And some analysis there by Alta believes that we need around £156 billion to get the whole nation's house stock from a D to a C.
So if you look at that in terms of average costings, we need around £6,000 for property for social housing, £8,500 for owner occupiers and £7,600 for private. So it's some variation in estimates, but it really shows how important investment is. And again, it's not like an overhead, it's an investment.
We're trying to basically secure better supply in the future. And again, you know, better investment for our most important asset of all, which are our residents. But to do that work, though, and again, we need to have, you know, a real good strategy for retrofit.
And I think for me, there needs to be a national strategy around this, which also encompasses skills development to ensure that we have the workforce to do it, and as well as technological and market innovations in doing so. There needs to be a clear path in how we deliver this, again, for the betterment of our residents. And again, residents themselves are really, really important, because we've got to bring them on the journey as well.
If you look at the guy who wrote PAS 2035, Dr Peter Richard, you know, the big aspect of that was that the residents were the first and foremost of that strategy. Again, residents are so important, they have to be on board. And how do we bring that all together?
For me, it's a national strategy. So yeah, really interesting question, but a lot to think about. More cans of worms, as you said, but really important thing.
[Anna Clare Harper]
A load more of the cans of worms. But okay, so having opened all of those cans of worms at a kind of national level, and I completely agree, we do need a strategy, we need an accurate understanding of what we have today in order to develop a sensible strategy. And a key issue is not having, what's that expression, that we've not got the staff, that we've not got enough people trained up to deliver what we need.
But what about on an individual level? What can investors and operators learn from current initiatives with regard to retrofitting homes that already exist?
[Jon Daley]
Oh, yeah. So I mean, there's some really good points in that. And I think for me, you know, the big one to start with is around data and understanding the stock.
As I said before, there's a dearth of information, you know, out there, we need further understanding of our stock site. You know, we need to understand, you know, what is eligible for retrofit, what needs retrofit. And again, every penny counts in the planning of that.
So again, it's really, really important, we can make some really good evidential decisions on that one. Likewise, as well, contractors availability and demand. So we did speak there about skills and availability, but we're showing really from figures from the national programmes of works, things like social housing, decar fund, home upgrade grants, the border upgrade scheme, the Great British insulation scheme, and the energy company obligations that contractors need to be invested in and skills need to be invested in.
Likewise, as well, because they all tend to come out at similar times, demands are massive, and we need to be able to plan these things better. And again, as investors, and also as well, asset managers in general, of properties and obviously investment funds, we have to be kind of strategic in the way that we operate with these funds around timings and contractor capacity. But alongside that, again, according to all of them funds as well, as I said before, residents are so, so important, we have to bring them on the way.
It's not just about eligibility. But again, it's about preventing things like resident refusal that we've seen in national programmes, and also providing effective residents educated to ensure sustainable usage of their measures installed. It's so, so important.
But there's a lot that we can learn from and of course, we're learning as each day goes.
[Anna Clare Harper]
Yeah. So one of the things that you touched on there was funding, which we're going to come back to. I think for a moment, it's just worth focusing on one of the massive challenges for investors, which is keeping up with regulatory changes and standards.
We talked about funding, can you just talk about some of the key recent regulatory changes that investors need to know about? And, you know, whether that's rental reform, or happening now, rental reform through to the relatively recent Building Safety Act, and just kind of run us through the headlines of what has changed and how that affects investors.
[Jon Daley]
Absolutely. So rental reform, such a big, big topic at the minute, you know, it's currently in its third reading, it had the Commons reading quite recently, and have been for us for a while now, again, it seems to be evolving by the day, I think, previously, you know, we thought it was going to go through quite quickly, quite sufficiently. But at the same time, you know, we've seen a lot of discussion, we've seen a lot of MPs seeking amendments, which I'm sure we've had quite recently, around things like the selective licensing and legal reviews, because it was originally around, you know, a fairer private sector for all.
But again, I think in relation to net zero sustainability, and of course, our residents, the two big factors I'd say around that for investors is that there's increasing amounts of consumer regulation. And also, most importantly, going to be a bigger focus on accountability of providers. So to provide you with a couple of examples of both consumer regulations, you know, we've seen a lot more around housing ombudsman.
So again, got confirmed by the Secretary of State that it's going to be looked at by the social housing ombudsman, but it's going to have its own rules for private. Likewise, as well, we're seeing a lot more understanding around AWAB law, although it's for social, you know, will it go into private as well, which I believe it will be, because again, it's basically a generic housing issue in general. And again, looking at things like accountability, we're looking at things like property court, around documentation, and most importantly, around decent home standards to ensure sustainability of homes in terms of condition, and also, you know, livability.
But I think what gets me with these ones is the fact that we're moving away from the idea of sustainability for investors as just energy efficiency, and we're looking more towards holistic sustainability in homes in general, like the fact that we have to care for the home, as well as the people who live in them. So for investors, a lot to take account of, but again, it's only going to benefit the most important asset of all, and that is our residents.
[Anna Clare Harper]
Okay, very comprehensive. Thank you. I've heard it be said by social housing providers that they sometimes feel like social housing is kind of used as the, it's almost like the canary in the coal mine, like to test things out, and then those same measures are implemented in the private rental sector later when it's improved in the social housing sector, which kind of makes sense from some perspectives, in terms of scale.
But making sense of ESG standards overall can be really challenging. So I wonder if you can just explain some of the key sources of standards, and who the relevant bodies are, both for the kind of social and private rental sector. And we've talked previously about COP, about the UK Green Finance Strategy, about reporting standards, about transition plans, and so on.
What are the different bodies, and what's their significance?
[Jon Daley]
I think it's a really interesting one, that I think it's come away from this idea of social versus private, in a sense, because I think initially, yeah, there was, because there was a greater regulation on social, and if you look at the legislation, that's the way it was. I mean, I could be here for another hour or two, just talking about that, but ESG is bringing everything in together. But as I say, I think there's three things behind this.
I think first and foremost, we're starting to see a massive growth in market in general, and the popularity of it. So the Green Finance Strategy, which you hit on there, very, very important document. It's had two iterations.
The most recent one, the 2023, said that 90% of all global GDP are covered by net zero targets. But most interestingly, global management of assets, regardless of what it is, under ESG, will be worth $34 trillion by 2026. And transitional goods on their own, just in the UK, is £1 trillion.
So we're seeing a massive growth in the importance of ESG, and big firms like KPMG came out publicly and said, this will potentially be the only way to do business in the future. So investment's got to incorporate ESG. But at the same time, we're looking at accountability and alignment towards these practices, because there's a myriad of different bodies, again, like the International Sustainability Standards Board, the Transitional Plan Taskforce Standards, the Global Real Estate Sustainability Board.
There's so many, but at the same time, we're seeing national trends and international trends of alignment towards these. So to give you a little fact and figure, sound bite, 90% of S&P 500 companies, so the 500 biggest companies in America, published their ESG to investors using the ISSB and the TBT, so the International Sustainability Standards Board and the Transitional Plan Taskforce. For the UK and ourselves, we'll want to keep showing this accountability after the Paris Agreement and Climate Act legislation itself.
There's a big focus on the green finance strategy to come away from things like greenwashing, and to have effective accountability in the way we provide values in a way that's not just ROI. And we're seeing this, interestingly, from investors as well. So PricewaterhouseCoopers, PwC, done a recent survey on investors on this exact topic, and they believed, according to the survey, 86% of investors believe that ESG measures help with not just the non-financial risk factors to ensure sustainable business, but also, as well, an effective effect, should we say, on long-term shareholder value.
So it's really, really important, and it's not going anywhere. It's here to stay.
[Anna Clare Harper]
Okay. We've covered a lot there. So regulations are quite a challenge, and funding, that we touched on just earlier, opportunity in that context.
I know you're all very into navigating the world of grant funding, which, by the way, is quite a challenge for people who are kind of outside the sector. It can be really difficult to navigate all of this and the different requirements. So I thought it would be helpful and interesting if you could walk us through some of the main sources of funding for ESG investment, and in particular, retrofit in the UK.
[Jon Daley]
So there's quite a bit on there, and I hit on these a little while back. Depending on the sector, specifically for environmental works and eco, and of course, retrofit, we've seen this across sectors. So we've seen things like the Social Housing Decarbonisation Fund, which was, again, specifically for the social aspect.
We've seen this in a number of different waves. So I think it started off initially at 50 million a wave, and it went up to as high as 700 million in the last wave, and in the most current wave, I think it's 150 million. So there's been quite a bit on that, and that was promised in the Government's manifesto, which, again, they're investing in.
We've also seen things like the Home Upgrade Grant. So that is more so on properties that aren't on gas, or again, in more rural areas. We've seen the Boiler Upgrade Scheme.
So that's had quite a significant amount of funding, I think. I think it's about 750 million, if I'm right. I'd have to read off the figures, but that's more so about transitional funding towards more renewable heat technologies, things like your air source heat pumps, and a few other things.
And then also, more recently, we've had the Great British Insulation Scheme. So that is all around one measure specifically for any property around insulation specifically. So again, that was more about a response from government around insulation measures.
But the main one really for the private sector is within eco stuff, the energy company obligations, and that was a duty put on to energy providers. It's provide effective funding directly for themselves. It's towards less energy efficient households in relation to the home itself, but also low income.
So it's a direct response to poverty measures. And that's worth about 3 billion up to 2026. So there's quite a few schemes going on.
But the one thing I'd have to stress at this point is that there's going to be a general election soon, and we could see a change in terms of policies in the interim. And again, potentially, that might be a change dependent on what the result is going forward. So we could see more, we could see less.
But the one thing that we can agree to is that we have them climate targets. That's one of the things being I think it's about 19% of all emissions that we have to lower resource usage, of course, carbon within this sector. So there's loads to go on.
But yeah, really good question. I appreciate that.
[Anna Clare Harper]
And one more in just in relation to that. So let's say you were helping someone to navigate to identify the right sources of funding for them, you know, what they were eligible for, and how to apply for particular grant funding. Where do you start?
[Jon Daley]
That's such an open question. So I think for me, it's to look maybe in line with government measures and looking at the way local authorities look at that. So for me, they're really, I'm very rest and focused.
And again, looking at properties in general across the country, there's a massive target of fuel poor households. And that's not my term, that is a government term. So that's looking at properties that are under EPPC and looking predominantly at the lower properties.
So again, under the minimum energy efficiency standards, we are looking at properties in the sector of EPCE. And that's what Eco's targeted at specifically. So again, it's those RIE.
And we're looking at that. But likewise, we have to look at it also in light of income and looking at resident specific factors because a lot of these funds do rely on the interplay between the property itself and of course, the resident income to be able to basically to fund the energy at the minute. So for me, it's about looking at them fuel poor households, again, government term, but how do we provide a sustainable tenancy within that?
And how can we provide better resource or work to be able to provide less as well to ensure resource reduction? And of course, as well, a better quality of life for the residents in terms of not just a disposable income, but a healthier household as well, because again, a better insulated home, obviously a less energy intensive homes, not just good for the environment, but it's also as well great for the residents. They have a healthier place to live, which I'm sure if you're looking at, you know, costings on things like the NHS and that, it does have a massive impact.
So yeah, I'd start there. You could talk about that all day, but that's how I'd start.
[Anna Clare Harper]
I know you could. I know you could. Thank you for that.
That's really, really helpful. So and it leads me nicely on to my final question, which is about cold homes and damp and mould, which obviously have a significant impact on health. Can you just walk us through the costs, for example, the cost of cold homes, damp and mould on the NHS and what is being done about them?
[Jon Daley]
Fair enough. It's like great minds think. I can think we were both thinking the same thing.
But yeah, no, it's a really, really interesting point. I talk a lot about housing and health, because as I say, for me, it's not just about the four walls. For me, it's about our most important asset, and that is our residents.
I mean, looking at statistics around this, with the BRE, which is the Building Research Establishment, a really, really key body, £540 million every year is spent on primary care just around cold homes, just on primary issues. That's things like your asthma, your skin conditions and COPD. And it's not really looking at anything further long term.
And when you think about it, how many conditions are aggravated by a cold home? We look at the figures as well, statistics show it's 3.8% of homes have damp in at least one room. So that's nearly 800,000 homes.
Again, that's across tenure. It's absolutely massive. And you're looking at how important this is.
I mean, we can only look at some of the figures further around the complaints that are coming in, in terms of funding of the social housing unemployment, and also as well around that further media around consumer regulation. And of course, I can never not say about it around the untimely death of a well-being shack as well. And the fact that we're seeing a lot more media, a lot more understanding.
And we're even getting to the point where Amnesty International, I've done a real life drama called Before Our Eyes starring Olivia Colman from The Crown. And it's getting that well known around it that there's a massive link between housing health and providers. And again, as the country in general, we have to be aware of these things.
In light of this as well, the NHS, if I read brightly, it's one of the big three issues of content in relation to the election. And we know the NHS is stressed. But at the same time, there's no single cause for that stretching.
I mean, there's a lot going on. But again, investment in good homes and to provide higher quality homes will hopefully mitigate that. So I can't really stress enough how important a healthy home is for not just sustainability of our environment, but of course, the sustainability of our residents too.
[Anna Clare Harper]
Yeah. Yeah. And residents and communities, right?
It's all so, so strongly interlinked, which makes sense. So thank you so much for helping us navigate all of that. I think we did leave a few cans of worms open.
But I think with the next question, if listeners want to find out more about you or get in touch or find out more about G2M, what is the best way for them to do that, especially if they need to close some of those cans of worms?
[Jon Daley]
Definitely. So there's a few things you can go on. So first and foremost, you can find me on LinkedIn.
That's J-O-N space D-A-L-E-Y. You can also as well, email me. So that's jon.d@g2mgroup.co.uk. And of course, as well, you can go on our website, which is g2mgroup.co.uk. And of course, if you want to get in touch, please do because there's nothing I find more interesting than speaking about the weird, wonderful and interesting world of sustainability. So I really appreciate being on here. And it's been amazing being able to speak about some of these things.
[Anna Clare Harper]
Honestly, it's a pleasure for me that I think you have an incredible level of knowledge around this stuff and enthusiasm. And we really need that as a sector. So yeah, thank you so much.
Thanks for joining me. And thank you for listening. Bye.
[Jon Daley]
Bye.
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