Warm Homes grants run dry in several councils as demand outstrips funds

Several English councils have run out of money for the Warm Homes Local Grant only months after it launched, according to Local Government Chronicle. York, Lewisham, Sheffield, Liverpool and Cambridgeshire are among the areas that have closed to new applicants or now ration places by need, as demand for free insulation, heat pumps and solar panels has outpaced the funding councils have actually received.

What happened

The Warm Homes Local Grant lets eligible councils draw down government money to upgrade homes with an Energy Performance Certificate rating of D, E, F or G. Owner-occupiers get the work fully funded; private landlords get their first property fully funded and a 50% co-funding arrangement after that. Grants are capped at £16,600 for insulation and other fabric measures and a further £16,600 for low-carbon heating, with combined support on one home limited to £30,000. To qualify, a household needs an income of £36,000 or less, a home in a low-income postcode, or receipt of specified means-tested benefits.

Per Local Government Chronicle, councils bid for £1.7bn of this money for the 2025-28 period but only £500m has actually been distributed so far, out of a wider £4.4bn Warm Homes pot — leaving £3.9bn unallocated. The practical result: Liverpool, Leeds, Northumberland and Tunbridge Wells have stopped taking applications; Cambridgeshire and Peterborough have used up their entire year's budget; York has paused its scheme for the rest of the financial year after exhausting its allocation with barely any publicity; and Sheffield, which has identified more than 26,000 fuel-poor homes in the city, expects to upgrade only around 1,000 of them by 2028. Lewisham has found 4,500 eligible council homes but funding for just 800.

Energy secretary Miatta Fahnbulleh said on 28 September that she intends to devolve the Warm Homes Plan so that "mayors, local government and communities" can invest in their areas directly, but no date has been set for releasing the remaining money. Councils and the cross-party network UK100 are now pushing the chancellor to commit the rest at the Budget. As UK100 chief executive Christopher Hammond put it, "you cannot devolve good intentions and an empty pot."

What it means for your costs

If you're hoping for a free or subsidised upgrade through your council, check with them directly before planning around it — several schemes covered in the report are now closed or have long waiting lists, and that picture could change (or get worse) depending on what the Budget delivers. It's worth asking your council specifically whether its Warm Homes Local Grant allocation is still open, since availability now varies a lot by area.

Two things are worth separating out, though, because they don't depend on council budgets and aren't affected by this rationing:

• The Boiler Upgrade Scheme still offers £7,500 off an air or ground source heat pump in England and Wales, provided the installer is MCS-certified. It isn't means-tested and isn't administered by councils, so it sits outside the funding squeeze described above. (Scotland has its own Home Energy Scotland grant of up to £7,500, plus an optional interest-free loan of the same amount.)
• 0% VAT on energy-saving materials — heat pumps, insulation and solar panels, including batteries — continues to apply until 31 March 2027, regardless of whether you receive a grant.

For homeowners who don't qualify for the Warm Homes Local Grant, or whose council has already closed its books, the realistic comparison is the full retail cost of the work. An air source heat pump typically costs £12,900 once you deduct the Boiler Upgrade Scheme grant from a full installation of £10,000 – £16,700; see Air source heat pump for how we work that out from labour and equipment costs by region. External wall insulation, one of the "fabric-first" measures councils are funding, typically runs to £26,000, and a 6 kWp solar PV system with no battery is around £12,500 before any grant.

Given how patchy local funding now is, it's worth getting more than one quote regardless of whether you're grant-funded or paying in full, and using our "is my quote fair" tool to check what a contractor is proposing against local market rates before you sign anything. We calculate our figures from labour hours multiplied by local trade rates plus materials, then check that against current market prices and real quotes, so they should hold up whether or not a grant is involved — but a grant-funded job and a self-funded one are priced the same by installers either way, so a second quote is never wasted effort.