Did the UK crack the code on home energy efficiency?

A conversation with Eliza Owen, Jim Driver, and Russell Smith

What if upgrading a home to be more energy-efficient was as simple as having a smart plan — and the right data — as a guide? The U.K. has spent nearly two decades collecting detailed energy info on millions of homes, taking a granular look at everything from window materials to boiler ages, to learn what works (and what doesn’t) when it comes to cutting energy use and costs. Meanwhile, countries like Australia and the U.S. are still building their datasets.

But it’s not just about data collection. Knowing the details of a home is only the first step. What really counts is using that information to make smart, cost-effective decisions. It’s about finding the right balance between immediate upgrades and long-term planning. And, of course, understanding how policies and incentives can encourage everyone to get on board with energy efficiency.

In this episode of Beyond the Buildings, Cotality’s guest host Eliza Owen chats with Russell Smith and Jim Driver to discuss the real stories behind energy upgrades and chat about the lessons that Australia and the U.S. can learn from the U.K.

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In this episode:

3:13 - How do the U.K., Australia, and the U.S. compare in terms of energy efficiency? What strategies have proved successful for upgrading the energy performance of older homes?

7:09 – Do homeowners care about energy ratings? Has the value of energy efficiency shifted?

10:07 – What can Australia learn from the U.K. to successfully encourage more energy efficiency?

13:35 – Erika Stanly does the numbers in the property market in The Sip

14:40 – What is one step Australia can take to advance energy efficiency across the board?

Transcript

Erika Stanley:

Hi, this is Erika Stanley, the facts guru for Beyond the Buildings. You are tuning in to an episode of our bi-monthly podcast. We're just collaborating with our Australia team. So today's host will be Eliza Owen rather than Maiclaire Bolton Smith. Even though our host is changing, our perspective isn't, we're still going to dive into the questions about the property market and explore them from every angle. Let's get into it.

Eliza Owen:

Welcome to Beyond the Buildings by Cotality. I'm your host, Eliza Owen. Today we are taking a break from regular programming to once again look at the property industry from a global point of view. This is the final episode in our three part sustainability series and today we are going global to learn about the UK experience even though we are changing our perspective. In this episode, we're still going to satisfy our collective curiosity, explore questions from every angle and look beyond the obvious. With every conversation we illuminate what is possible when it comes to adapting properties to respond to our environments. Most countries don't have to start from scratch. Many countries around the world are already doing the hard work, testing what works, and pushing policy, technology and innovation into the mainstream. And one country that's well ahead, particularly when it comes to energy efficiency, is the United Kingdom.

From mandatory home energy ratings to government backed retrofit programs and even the way lenders are factoring energy performance into mortgages, the UK is making energy resilience part of everyday property decisions. To explore all this, I'm joined by two people who know the UK landscape inside out, Jim Driver and Russell Smith. Jim Driver leads Totalities operation in the UK. He's been working on the ground with lenders, tech platforms and regulators to embed energy performance into the heart of the UK property ecosystem. And Russell Smith also from Cotality is a veteran of the UK retrofit movement. He has advised the UK government on energy strategy founded one of the most successful home retrofit companies in the country and brings decades of insight on what works and what doesn't when it comes to making homes more sustainable.

Erika Stanley:

Welcome to the show. Before we get too far into this episode, here's a friendly reminder about how to see what's coming up next in the property market. To make it easy, we curate the latest insight and analysis for you online, find us using the handle at Cotality on all our social media

Eliza Owen:

Channels. Okay, so Jim and Russell, welcome to the show. It's so good to have you both here. Jim, I want to start with you and just know how you would describe the UK's current position on energy efficiency in housing compared to say Australia or the us.

Jim Driver:

Hi Eliza, it is great to be here and thank you for the opportunity to come and chat to you. So the UK started back in 2007, so nearly 18 years ago, collecting data of energy performance for properties through something called the Energy performance certificate, which was a European bit of legislation. So for the last 18 years we've collected some fairly detailed data, about 200 plus data points per property. So 65 plus percent of the UK housing stock. We know where it faces, what the window material is, how much g glazing there is, what the boiler age is, et cetera, et cetera. Now by comparison, Australia and the US have got less data. So the US probably got about 5% coverage. They don't collect the data in quite the same way. It's more of a voluntary scheme. And in Australia, obviously you've made a relatively recent start and your approach has been well using existing data to make the assessment and more of a less granular level. So I think the biggest challenge comparison really is the UK has got the granular detail of the properties and that allows us to do much more accurate modeling at a property level, whereas probably the US and Australia are more at the area level and looking at what the general trends are.

Eliza Owen:

Yeah, absolutely. As a data analyst, when you said 60% coverage in the amount of detail, I'm thinking that's the dream. That's amazing. Now Russell, you've been on the front lines of the UK retrofit space. What have been some of the most successful strategies in upgrading the performance of older homes?

Russell Smith :

So I guess there's two approaches to answer that question. The first one is if I were a homeowner, the most successful strategy really is to get yourself a plan. There were plenty of people that might take advice from the local builder or electrician or somebody they met on the bus and that's the sort of thing they just crack on with doing some work. But really the key thing is being able to think about all the things that might influence that decision in the long term. Are you looking to extend the home? Are you going to have any more kids? Are you going to retire as well as the building itself and what you need to do to the building to reduce your energy consumption or I whether it as well in the UK we've got issues around a warming climate now as well. Even we're speaking to you today with very, very warm temperatures in the UK.

So bearing all of those things in mind and having a plan upfront is absolutely essential for minimizing the spend of a retrofit over a long period of time. Just doing things willy-nilly means you end up taking things out that you regret. But the same applies if you're looking at it from a stock perspective. So one of the things that we do here is we work for large landlords and we help put plans together for the long term for those guys who might own, one of our clients has got 125,000 homes and we work for local authorities who want to put a net zero strategy together for all of the properties they look after within their geographic area. It's the same principle except the one that the other journey they need to go on is a data journey and collecting the data, improving the data, and having a strategy to improve it over time.

But as always, the case is to make sure that you are thinking about things in the right order, spending the least amount of money as a consequence. And just to add into the end of that, we are now doing that for mortgage providers in the UK now helping them to understand their stock that they have a responsibility for and that if we are thinking in the long term, they might end up being regulated in some way to reduce the carbon emissions of that stock so they've got the same challenges and they'll be on the same journey.

Eliza Owen:

Yeah, that's really interesting. Thank you. It occurs to me as well that because of the differences in the housing markets too, we have a system of really individual landlords in Australia. So I can imagine having big corporate landlords can help to scale a lot of energy and efficiency and retrofitting in the market and energy efficient development. There's a lot of talk here in Australia about whether buyers and sellers even care about energy ratings. What's been the consumer response in the UK and how did that shift over time? Russell, I might start with you.

Russell Smith :

As Jim said that the EPC regime came in in 2007 and for the most part of my career I've been on the periphery of that regime. If I'm honest, Jim's been more into the weeds of it than I have, but my feeling is that those people that are investing in their properties are doing so because they want to invest in their properties, not because the EPC is encouraging 'em to do it in a certain way. There have been some regulations that are forcing private sector landlords to move in. They've got to get to a certain level before they can rent the property. And I think that is having an impact. And we're going to see that ratcheted up in 2026, we hope because that's the poorest performing stock in the uk, the private rented sector. But actually I still don't think there is a link between the EPC rating and the value of the property. Therefore it's not hitting people's pocket, therefore it's not shifting the dial. That's my view on it anyway.

Eliza Owen:

Yeah, interesting. What about you, Jim?

Jim Driver:

Yeah, I would agree with Russell that we need more legislation. I mean, the last three to four years we've seen energy prices go up quite significantly and that's driven people to be more conscious about how their houses perform. But still, if you're going to spend 12,000 pounds on a new air source heat pump, you need to be pretty convinced that it's going to make a difference. And most people live in their homes, so somewhere between five and seven years and the payback for even a fairly simple measure is probably greater than that. So from a pure financial point of view, it's quite difficult to make the argument stack up. I think there are things the government could do and legislation they could bring forward so that they can encourage people to invest further and invest faster. In the UK we have a disproportionate balance of how our energy is paid for between gas, electricity, so electricity is quite expensive per kilowatt, and the government had the ability to change that. I think it's things like that. It's thinking sort of a really quite grand scale, how we're going to encourage people to be able to take this seriously.

Eliza Owen:

Yeah. So it sounds like for the consumer, they don't necessarily see the return on investment, so it does really need to be government policy that drives the shift and the UK has seen its share of bold policy moves and maybe had a few missteps as well. Are there any key lessons that Australia should learn from what hasn't worked in the uk?

Russell Smith :

Should I talk about Green Deal briefly, Jim?

Jim Driver:

Yeah, why not?

Russell Smith :

So the green deal was announced with a big fanfare in 2012, and the idea of that mechanism was, it's mainly a financial mechanism. The idea being that you could put a charge on the energy meter of the property to repay some finance, and the reason for putting it on the meter rather than it being a loan to the individual was that that could stay. So as Jim said, people move house fairly frequently, but some of the things that you pay for would pay for themselves over a longer period than the duration of your tenure in the building. And the mechanism in of itself is brilliant and it still exists as something we could pick up and use again, but it was brought to a halt because the government felt there wasn't enough take up. But really they hadn't advertised it very well. And moreover, the quality assurance regimes weren't keeping an eye on the contractors particularly well.

So whilst they were out there busily selling, and I think it was your team back in the day, their gym were managing most of the arrangements in the background, the machinations meant that some of the customers weren't actually in a good place once the result was installed and the ministers had no choice but to stop it. So they had a few things that got it off the ground, didn't really push it very hard, didn't police it well enough and it stopped. So there were a few things, fundamental things missing from the way that you would really police this if you really wanted to take it seriously for everyone in the country.

Jim Driver:

Yeah, I would agree. It was a really innovative and very exciting opportunity. Unlike anything that's cutting edge, they're going to be rough edges to it. And unfortunately the rough edges got ahead of us and the scheme was closed down. But it's something like green deal where you can make sure that the measure that you've installed is paid back over the lifetime of the measure, not in a single lump that will encourage people to do something.

Russell Smith :

One thing I'd add as well about our grant mechanisms in the uk, if I had a magic wand, I wouldn't set them up as the way they are right now. So for those people on low incomes, there are grants available for people to improve their properties. We've got a high number of homes that are regarded as fuel poor. So in other words, the proportion of their income spent on heating their building, it far outweighs most of the other costs they have. So there are grants available to help those people to reduce their energy consumption, but the grant is administered via extensively via contractors. So contractors go out, they find the customers, they spend the grant, and actually the contractors are finding the people they'll make the most money from with the grant that they have access to rather than trying to do the right thing by every customer. So if it administered slightly differently, I'd definitely encourage Australian policy makers to go and learn some of the lessons of things that haven't gone quite right here before writing anymore.

Eliza Owen:

To be honest, it sounds like some attempts that we've had in implementing schemes, I think we've had similar takeaways. So it's an important thing to keep in mind for policy makers going forward. For sure.

Erika Stanley:

It's that time again, Cotality just dropped new numbers about what's happening in the housing market. Here's what you need to know. Affordability and location are both crucial when buying a home. But for Gen Z, finding a balance between the two is often a challenge. Cotality, data revealed people born between 1997 and 2003 made up 13% of all home buyers in 2024, but those buyers weren't flocking to major metropolitan areas. Instead, many Gen Z buyers are purchasing homes in the Midwest and the South where prices are lower and there are more houses to choose from the downside, these regions have higher exposure to natural disasters, which drives up the long-term cost of home ownership. Frequent perils like hail contribute to rising insurance premiums, which Cotality data shows have climbed 74% over the past 15 years. To find out more about the long-term costs for today's affordable homes, visit Cotality.com/insights. There's also a link in the show notes, and that's the sit. See you next time.

Eliza Owen:

The last question I had for you is if you could recommend one action that Australia could take tomorrow based on the UK's experience that would accelerate energy efficiency, what would that be? Jim, I might throw to you in the first instance,

Jim Driver:

I think the biggest thing we did correctly, it was back in 2007 when we started surveying properties at a property level. And the faster Australia can start adding in legislation so that when you buy or sell a house, you've got to have a proper inspection the better. And back in 2007, there was lots of complaints and people were sort of up in arms about the cost and the time and the disruption to the house buying and selling process. But actually it takes 30 minutes and we now have some amazing data to be able to go forward. And I think eventually over the next, I don't know, five, 10 years, as net zero becomes more and more important, we'll look back and we'll say that was an inspirational decision to properly survey properties. And if you had the wherewithal, the government, now we've got the data to be able to say how should they spend the money to be able to make the biggest bang for the buck? And without the data, you can't make that decision. So if Australia, if they could do one thing and it feels like a really cumbersome, start making someone measure windows orientation, measure installation thickness, but my God, eventually you'll have the data to be able to drive policy properly.

Eliza Owen:

A hundred percent. And I think it could open up a lot of new opportunities in that space as well to have professionals that could come in and do that kind of surveying. That's a great idea. Russell, how about you?

Russell Smith :

Well, I'd agree with Jim actually. Perhaps if I had a second shot at this and you asked for the second most important, I would say it would be building on the data to provide proper incentives for people to do this. I think what we tried to do here is have a go at some regulatory measures around the outside, but nobody likes regulation. No matter what politician you speak to, it's not something they ever want to implement. But proper incentives I think would really help. We mentioned earlier on about the fact that we don't believe that the EPCs are providing an incentive. Well, that's because they're not linked to anything that actually would benefit the householder in the long term yet. So one of the things we've been speaking about here for quite a long time is a link between and an improved EPC rating and a rebate on the stamp duty people have to pay when they first buy a property.

I'm not quite sure what you might have in Australia that's similar to that, but if somebody has in the first six months to a year of buying a property, if they've made a big improvement in the performance, they get a rebate on that stamp duty. It's a no brainer. I genuinely think that that kind of model will pay for itself in the long term anyway, because of the VAT receipts on the back of it and the improved market push on the way that all the ripples go through the industry on how the money is spent. And I think data first, absolutely, as Jim said, but you can start to really then build on some really interesting things to move the market forward on the back of it

Eliza Owen:

A hundred percent. And that's talking directly to people's pockets too, right? I think that would be very popular in Australia as well. Well, thank you so much Jim and Russell. It's been a pleasure having you on the podcast. Thank you so much for your time.

Jim Driver:

No worries. Thank you.

Eliza Owen:

Cheers. And thank you for listening. I hope you've enjoyed our latest episode. Please remember to leave us a review. Let us know your thoughts and subscribe wherever you get your podcasts to be notified when new episodes are released. And thanks to the team for helping bring this podcast to life producer, Andrew Barklay, editor and sound engineer Ro Roman, our facts guru, Erika Stanley and social media duo, Sarah Buck and McKayla Brooks. Tune in next time for another conversation that illuminates the ideas that will define the future.

Erika Stanley:

You still there? Well, thanks for sticking around. Are you curious to know a little bit more about our guests? Jim Driver is the managing director of Cotality UK. Jim oversees their strategic direction product roadmap, and key client relationships for Cotality, UK's energy solutions and mortgage lending markets. Jim has a passion for delivering innovative market, leading data-driven technology solutions that have helped transform the UK markets in which Cotality operates. In 2005, Jim co-founded eTech, the predecessor to Cotality business in the uk. Prior to this, Jim served for 10 years as a captain in the British Army, completing a degree in software engineering at Cranfield University. Russell Smith is the parody projects managing director at Cotality. Russell founded parody projects in 2005 and is a recognized expert in the retrofitting of domestic properties. Parody was acquired by Cotality in May, 2024, and Russell leads the team that supports landlords, local authorities, regional governments, and finance providers in understanding their retrofit responsibilities and options for taking on the challenge of tackling the complex challenges ahead. Parody services are built around Russell and colleagues direct experience of retrofitting homes, so the experience, cost, risk, and innovation are backed into the service. Russell is also founding director of the National Retrofit Hub and founder and non-executive director of the Retrofit Works Cooperative. Russell is a chartered civil engineer.

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