In April 2025 the government launched the Warm Homes: Local Grant, a funding scheme designed to upgrade homes, reduce energy bills and tackle fuel poverty. As part of the wider Warm Homes Plan, this initiative partners with Local Authorities to deliver energy performance upgrades and low-carbon heating to privately owned and rented homes across England.
What is the Warm Homes: Local Grant?
The Warm Homes: Local Grant (WH:LG) replaced previous schemes, like LAD and HUG, streamlining the path for energy-inefficient homes (EPC D-G) in England to reach modern standards.
The big change for 2026: Unlike previous “off-gas” schemes, the Local Grant is fuel-blind. Whether a home is heated by mains gas, electricity, oil, or LPG, it is eligible for funding. This removes the “postcode lottery” for urban homes on the gas grid that were previously excluded from HUG2.
However, access to funding is subject to strict eligibility criteria and technical standards. This guide outlines exactly how the scheme works and how we can help you navigate it.
What Funding is Available?
The Financial Caps
The scheme uses two distinct “Cost Caps,” allowing for a comprehensive whole-house approach:
- Energy Performance Upgrades: Up to £15,000 (Insulation, solar PV, double glazing).
- Low-Carbon Heating: An additional £15,000 (Air or ground source heat pumps).
This creates a total potential investment of £30,000 per property – sufficient to transform a cold, damp EPC G terrace into a high-performing EPC B or C home.
Funding Rules by Tenure
The scheme rules introduce a tiered funding structure designed to encourage landlords to trial upgrades before rolling them out across a portfolio.
- Owner Occupiers: Upgrades are 100% grant funded, with no cost to the resident up to the £30k cap.
- Landlords (1st Property): Upgrades are 100% grant funded, with a full grant given for the first eligible property in a portfolio.
- Landlords (Subsequent Properties): Upgrades are 50% grant funded (capped at £7.5k per pot), with the landlord paying 50% of the cost.
Key Scheme Dates
- 1st of April 2025: Delivery window opened.
- 31st of March 2028: Final Delivery Deadline. All works must be completed and lodged.
Warm Homes: Local Grant Eligibility Criteria
To qualify, a property must strictly meet requirements across three categories. If it misses one, it is ineligible.
1. The Property
- EPC Rating: The property must have an existing EPC rating of Band D, E, F, or G.
- Target: All projects aim to reach EPC Band C (using the new RdSAP 10 methodology introduced in late 2025).
2. The Household
The household must meet one of the following pathways:
- Pathway 1 (Area-Based): The property is in an eligible postcode (Indices of Multiple Deprivation (IMD) Income Deciles 1-2). In these areas, income checks are waived.
- Note: Unlike HUG2 (which covered Deciles 1-3), the Local Grant is limited to IMD Deciles 1-2 to accommodate “on-gas” homes.
- Pathway 2 (Benefits): The household receives a means-tested benefit (e.g. Universal Credit, Housing Benefit, Pension Credit).
- Pathway 3 (Income): Gross annual household income is £36,000 or less.
3. Landlord-Specific Rules
- Rent Protection: Landlords must sign a declaration not to increase rent as a result of the upgrades.
- Subsidy Control: Must not exceed the Minimal Financial Assistance (MFA) limit of £315,000 over a three-year period.
- 2030 Compliance: With the Warm Homes Plan now mandating EPC C for all private rental sector (PRS) homes by October 2030, this grant is the most cost-effective way for landlords to meet their legal obligations early.
The Role of PAS 2035 and Quality Assurance
Crucially, all work delivered under the Warm Homes: Local Grant must be compliant with PAS 2035:2023. This ensures that “fabric-first” isn’t just a buzzword, but a technical reality.
As the Retrofit Coordinator, we ensure that:
- Ventilation is prioritised: To prevent the “sealed box” effect that leads to mould when air tightness is improved.
- Design Integrity: We act as the technical gatekeeper, ensuring a heat pump isn’t installed before the loft and walls are adequately insulated.
- TrustMark Lodgement: All work is recorded on the national database, protecting the property’s long-term asset value.
Our Proven Expertise: Shropshire Council
We delivered exactly this model of independent oversight for Shropshire Council’s Sustainable Warmth Shropshire programme – acting as the Council’s technical partner and “critical friend” across 50 rural properties and five specialist installers, coordinated under the Warm Homes: Local Grant.
What’s Next? Warm Homes: Local Grant Delivery
Successful delivery under the Warm Homes: Local Grant requires a careful balance between meeting cost caps and achieving the target EPC Band C. The transition to a “fuel-blind” approach has opened doors for thousands of gas-heated homes, but it has also increased the technical complexity of Retrofit Design.
Ready to scale your local grant delivery? Our building energy experts are your technical partner, managing the complexities of retrofit delivery so you can focus on hitting your targets with confidence.
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