The Chancellor's Autumn Budget, delivered on 26 November 2025, confirmed a significant shift in UK energy efficiency policy: the scrapping of the Energy Company Obligation (ECO) from April 2026 and the changes to the Renewables Obligation. This move, which forms part of a package shifting some policy costs onto general taxation, is projected to save the average household approximately £150 on their energy bills in the short term.
The Chancellor's Autumn Budget, delivered on 26 November 2025, confirmed a significant shift in UK energy efficiency policy: the scrapping of the Energy Company Obligation (ECO) from April 2026 and the changes to the Renewables Obligation. This move, which forms part of a package shifting some policy costs onto general taxation, is projected to save the average household approximately £150 on their energy bills in the short term.
However, for the UK's property sector - from mortgage lenders and surveyors to landlords and retrofit professionals - this headline saving masks a profound and immediate market challenge. The removal of ECO dismantles a major, supplier-funded mechanism for financing energy efficiency works on fuel poor homes.
As a leading provider of property data, analytics, and retrofit software/services, Cotality UK has analysed the immediate threats, and identifies some significant opportunities, created by this policy for the mutual business interests of our clients and partners.
The immediate threat: pipeline contraction and uncertainty
The most immediate and material impact will be a near-term drop in the pipeline of ECO-driven retrofit projects. Energy suppliers and their contractor networks have been significant buyers of retrofit services. The removal of ECO will reduce the guaranteed pipeline of insulation and heat projects they commission for at least several quarters while new alternative funding routes are established.
The Installation Assurance Authority Federation (IAA) estimates from a recent survey that the closure of ECO has already resulted in over 3,000 job losses and over 26,000 Installer jobs will be lost in the coming 6 months. They note this dwarfs the job losses that were associated with Port Talbot and Scunthorpe Steel Works. This also creates uncertainty for the wider supply chain including Retrofit Professionals and Energy Assessors.
The market is looking for rapid clarity on replacement schemes. Not only is current total funding for social housing and local grant schemes significantly less than the equivalent annual funding under ECO, it is limited in its geographic coverage and already procured leaving little open to competition.
An additional £1.5 billion of taxpayer funding was announced for capital investment in fuel poor homes. The mechanism for delivery appears up for debate. With more competition for less work, there will be price pressure which - worryingly in light of the NAO report on solid wall insulation - could negatively impact quality. Lessons must be learned quickly, and embedded in the next iteration of fuel poverty funding.
The impact of the budget also reaches beyond ECO reliant companies to the wider property market. Mortgage Lenders want investment that improves the carbon performance of homes, and landlords may require help on the introduction of Minimum Energy Efficiency Standards (MEES). The broader context of overall taxation increases also creates a general "client budget squeeze" for private landlords, which may in turn impact their response to the MEES expected in the Warm Homes Plan.
The policy pivot: warm homes plan and a focus on quality
The Government has indicated that its support for energy efficiency measures to address fuel poverty will now transition to schemes funded through general taxation, to be defined by the long-awaited Warm Homes Plan. This change will be accompanied by a heightened focus on quality and assurance, following the NAO’s report on solid wall insulation under ECO.
This pivot presents three major opportunities for the entire property ecosystem, shifting the value from volume compliance to sophisticated targeting and quality assurance.
1. Higher Value for Granular Targeting and Prioritisation
With fewer broad supplier obligations, the remaining government and private retrofit programmes will need to be hyper-focused, whether means-tested or targeted towards high-impact homes.
Local Authorities and Housing Associations: Wave 3 of the Warm Homes: Social Housing Fund is already underway, but as replacement public funding likely to transition into the Warm Homes Plan, these organisations will need to maximise impact from every pound spent. They will urgently need data and analytics to identify high-impact homes, prioritise capital spending, and measure outcomes effectively.
2. Shift in Buyer Profile: The Rise of Private Finance
With the constraint on public/supplier funding, the government will have to bring forward standards and support for private finance if it is to deliver on its goals of cutting bills, reducing carbon emissions and building energy security, this does apply mainly to privately owned and rented homes as its an unregulated market.
Mortgage Lenders: The focus on achieving Minimum Energy Efficiency Standards (MEES) in the Private Rented Sector (PRS) could become a powerful factor in the mortgage market. Lenders will need to become strongly positioned with access to high quality, granular property data to understand credit risk and develop appropriate products. By offering retrofit loan products to their buy to let back book and the wider market, there is real potential for lenders to engage clients and reduce risk.
3. Increased Demand for Validation and Quality Assurance
Public scrutiny over retrofit quality, which was flagged under ECO, means replacement programmes will demand higher standards - but without more data on the problems found, it is difficult to identify solutions.
Retrofit Professionals & Assessors: While the immediate pipeline is a concern, the long-term outlook is likely to see new technologies incorporated into agreed approaches for assessments, validation and audits - to benefit efficient and accurate data collection, to evaluate quality and to increase audit coverage.
Landlords (Social and Private): Compliance with MEES, combined with the need to protect assets and tenants from high energy bills, should drive demand for high-quality, evidenced retrofit work.
How can Cotality help?
For Cotality, the flexibility to help our broad client base navigate market change is part of our core offering. Our large UK property datasets and workflow platform are positioned directly to service these major opportunities:
Targeting & Prioritisation: Our tools already help local authorities, housing associations, and private sector landlords quickly and accurately identify the need and opportunity for retrofit, maximising the use of capital.
Validation & Compliance: Our workflow and data validation products can provide the essential audit trails, document managment, quality assurance, and contractor performance data a new fuel poverty programme should demand.
Private Finance: We are already actively partnering with lenders to embed our data into their business models for retrofit loans, helping them model risk and opportunity, critical components for scaling private green finance.
Outlook for 2026 and Beyond
The abolition of ECO introduces immediate commercial risk and policy uncertainty. With each cut and funding cliff-edge it becomes more difficult to attract investment and retain qualified and quality staff in the sector.
The challenge now lies with the government to provide the promised clarity on the Warm Homes Plan and the replacement funding framework to mitigate the timing and policy risk currently facing the entire industry. The sector needs an urgent, clear roadmap for the next 5-10 years to encourage long-term investment in skills and capacity.
For our clients active in this sector - be they lenders, local authorities, or contractors - the strategy for 2026 must be to pivot from high-volume, compliance-heavy ECO work to high-value, data-driven, and quality-assured interventions. Cotality has the tools ready to support this transition, and stands ready to meet the demands of the new funding landscape, whether public or private.
