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Navigating the Retrofit Market: Opportunities and Challenges in the UK in 2023

Updated: Nov 2, 2023

The stark contrast in weather conditions being witnessed between northern and southern Europe this summer once again draws into focus the current situation with our earth’s climate. One witnessing some of the wettest summer months on record, the other witnessing the most oppressive and dangerous heat on record.



A dystopian image of the future created with the help of Midjourney.

We need to reduce carbon emissions rapidly this decade to avoid locking in earth temperature increases of 1.5C or more. Going beyond these thresholds will have increasingly negative impacts for people, our economy and most importantly the environment that we rely on. The brilliant image below by the Great Plains Institute demonstrates that the carbon budget is almost full, unless we act now.



In one of our earlier blogs from this year we discussed the UK government's Net Zero Strategy, also known as Build Back Greener, and how they plan to achieve net-zero greenhouse gas emissions by 2050. This strategy includes ambitious targets for reducing emissions in all sectors but as the global push for sustainability gains momentum, the retrofit market has emerged as a critical player in transforming the built environment into energy-efficient, environmentally conscious spaces. The phrase ‘The greenest building is the one that already exists’ is becoming commonplace within the industry now, so what are the opportunities….


In the United Kingdom, the retrofit sector has witnessed significant growth in recent years. In this blog, we explore the current state of the UK retrofit market, examining both the promising opportunities it presents and the challenges that must be navigated. We'll also delve into the noteworthy decision by Michael Gove, the Secretary of State for Levelling Up, Housing and Communities, and its potential impact on the retrofit market, with his recent decision on the M&S building on Oxford Street, London.


The Rise of Retrofitting in the UK

Retrofitting, the practice of upgrading existing buildings to improve energy efficiency and reduce environmental impact, has gained considerable traction in the UK. With ambitious targets to achieve net-zero carbon emissions by 2050, the UK government has recognized the pivotal role that retrofit projects play in reaching this goal. This has led to the allocation of funds, incentives, and policy support to bolster the retrofit market. One of the most significant incentives driving the retrofit sector is the £1.8 billion awarded to boost energy efficiency and cut emissions of homes and public buildings across England by the UK government. £1.4 billion will go to local authorities, providers of social housing and charities to upgrade homes and off-grid households with energy efficiency measures. On top of this, a further £409 million has been granted through the Public Sector Decarbonisation Scheme to help public sector buildings such as schools and hospitals drive down their carbon emissions. Upgraded heating systems, powered by cleaner, cheaper, renewable energy, will reduce the use of fossil fuels exposed to volatile global energy prices in the public sector.


Opportunities in the UK Retrofit Market

The UK retrofit market presents a plethora of opportunities for various stakeholders, ranging from construction companies and energy consultants to homeowners, architects, and commercial property owners. These opportunities if grasped by our government and our industry could include:


Economic Growth: The retrofit market has the potential to contribute to economic growth by generating jobs in construction, engineering, and energy consultancy. As demand for retrofit services increases, new job roles will emerge, driving employment opportunities in both urban and rural areas, alongside the innovation needed to meet the aspirational 2030 and 2050 targets.


Technological Innovation: The need for innovative solutions to enhance energy efficiency and reduce carbon emissions has fostered technological advancements. Smart technologies, energy management systems, and renewable energy integration are gaining prominence, creating avenues for technology-driven businesses to thrive.


Green Finance: As environmental consciousness grows, green financing options are becoming more accessible. Financing models that enable property owners to invest in retrofit projects with long-term energy savings are gaining popularity.


Carbon Reduction: Retrofitting plays a crucial role in achieving the UK's carbon reduction targets. By improving the energy efficiency of existing buildings, the retrofit market contributes significantly to the national goal of net-zero emissions by 2050.


All of these opportunities in the UK retrofit market are nicely summed up in the below diagram, courtesy of the National Retrofit Hub.



Challenges in the UK Retrofit Market

Despite the promising landscape, the UK retrofit market is not without its challenges. These challenges will hinder the sector's growth and overall impact if not rectified asap:


High Costs: Retrofit projects can be costly upfront, deterring property owners from pursuing them. Although incentives like the latest government grants exist, more comprehensive financial mechanisms are needed to make retrofits financially viable for a wider range of property owners. Just take a look at Introducing RetroFirst: a new AJ campaign championing reuse in the built environment (architectsjournal.co.uk) for a clue as to how the government could spearhead the cost issues!


Lack of Awareness: Many property owners and stakeholders remain unaware of the benefits and potential cost savings associated with retrofit projects. Raising awareness and providing accurate information about the long-term advantages of retrofits is crucial. We need to bang the drum, harder and louder!


Skills Shortage: The growing demand for retrofit services has highlighted a shortage of skilled professionals, from energy assessors to construction workers proficient in sustainable building practices. Addressing this skills gap is vital to ensure project quality and timely delivery.


Complex Regulations: The regulatory landscape surrounding retrofit projects can be complex and fragmented. Streamlining regulations and simplifying compliance processes would encourage more property owners to undertake retrofit initiatives.


Michael Gove's Decision on the M&S Building on Oxford Street

In July 2023, Michael Gove's decision regarding the Marks & Spencer (M&S) building on Oxford Street has the potential to have significant implications for the UK retrofit market. The minister’s conclusion is that the proposal was in overall conflict with the development plan. He said that material considerations weighing in favour of the proposal, such as the high accessibility of the location, as well as potential benefits to employment and regeneration, were outweighed by the failure to support the transition to a low-carbon future (contrary to paragraph 152 of the National Planning Policy Framework), and in particular by the harm to designated heritage assets (taking account of paragraphs 189 and 203 of the NPPF). The harm arising from the failure to reuse existing resources and the harm arising from embodied carbon – the latter has been given prominence by this decision – it will need to be very carefully considered by all developers when weighing up the viability of development options for existing building sites.



The M&S store on Oxford Street which had been earmarked for demolition – Source: Matthew Andrews/SAVE

This blog post has been written by Sean, one of the directors here at WR-AP . Sean's desire to work in an industry that could help people and society in a small way led him to pursue a career in architecture. You can read more about Sean here.

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