The Warm Homes: Social Housing Fund (WH:SHF), previously known as the Social Housing Decarbonisation Fund (SHDF), has been instrumental in helping housing associations and local authorities move towards their carbon reduction goals. With Wave 3 on the horizon (scheduled for May 2025), many organisations are eagerly waiting to access the funding they need for critical retrofitting projects, including internal and external wall insulation, loft insulation, solar PV, and heat pumps.
WH:SHF Wave 3 aims to improve the energy performance of social housing below EPC band C and bring it up to that level, helping to reduce carbon emissions and lower energy bills for residents. In fact, we know of at least one housing association that has pulled back on retrofit work in anticipation of Wave 3 unlocking more funding.
Wave 3 will bring a substantial amount of funding to support social housing decarbonisation. The government had previously committed £1.2 billion for SHDF Wave 3, aimed at upgrading the energy efficiency of tens of thousands of social housing properties across the UK. While the new labour government has said it will review the specific amount of funding available, its other commitments to the green agenda would imply WH:SHF Wave 3 is likely to be significant.
Wave 3 funding will focus on improving insulation, installing heat pumps, and integrating renewable energy solutions like solar PV to help housing associations meet the UK’s net-zero targets. The goal is to bring as many social homes as possible up to Energy Performance Certificate (EPC) band C, reducing fuel poverty, cutting carbon emissions, and supporting green jobs.
However, the industry faces a significant challenge: the looming shortage of skilled and reliable installation teams.
The Problem: Limited Installer Capacity
While Wave 3 presents an exciting opportunity to accelerate decarbonisation efforts, it’s important to address a growing issue that could impact the success of these projects: the availability of reliable installers. Many housing associations are already struggling to find experienced teams for existing work under Wave 2. With WH:SHF Wave 3 set to significantly increase demand, we anticipate an even greater bottleneck in available resources, making it difficult for many projects to move forward on schedule.
We’ve been working recently on some projects for a housing association that have faced significant setbacks very early on, for precisely this reason—contracting firms disappearing or being unable to find the capacity even to complete the pilot projects. This challenge is even more concerning as WH:SHF Wave 3 aims to improve energy efficiency at scale across social housing stock, meaning delays now could have long-term impacts. And this is despite this being a ‘quiet period’ as many HAs await the release of Phase 2 funding.
Why Is There an Installer Shortage?
The shortage of reliable installation teams has various contributing factors. The rapid growth in demand for insulation and renewable energy solutions has outpaced the availability of skilled workers. Many established and reliable teams are booked solid, and new staff require training and experience to meet the high standards expected by housing associations and councils. This creates a gap between the scale of retrofitting ambitions and the on-the-ground capacity to deliver.
Despite training programs being made available in local colleges (such as through our friends at Barking and Dagenham college, where we installed some training bays), high-quality installers typically require years of experience to get the finishes right. And inexperienced installers completing jobs before they are ready to do so creates significant risk of additional remediation or repair costs for the housing association.
Many installers come from overseas, including countries like Romania, which has historically provided a significant portion of skilled labour for the UK’s retrofitting industry. However, recent changes in immigration policy have made it more difficult for workers from the EU to come to the UK, leading to a reduction in the available workforce. The end of free movement following Brexit, coupled with stricter visa requirements, has created barriers for many experienced workers who would otherwise be contributing to these critical projects.
This shift in immigration policy has exacerbated the existing shortage, making it harder to bring in skilled labor from abroad to meet the growing demand for retrofitting services. As a result, housing associations are finding it increasingly difficult to secure the expertise needed, and the available workforce is under significant pressure to keep up with the rising workload.
The Risk of Waiting for Wave 3
For housing associations and local authorities, waiting until WH:SHF Wave 3 is a necessary but risky strategy. The energy shocks of recent years have highlighted the urgent need to upgrade homes and secure Britain’s energy independence, making it critical that housing associations prepare early. The influx of projects expected to launch once funding is available will exacerbate the installer shortage, leading to delays, increased costs, and the potential for compromised quality as less experienced teams step in to meet demand. The best approach is to secure experienced partners now, ensuring that when Wave 3 funding is allocated, the installation teams are ready and capable of delivering results.
Our Experience and Commitment
At Pyramid Eco, we’ve successfully partnered with councils and housing associations across the UK, including Havering, Islington, Hackney, and many others. Our team has a proven track record of delivering high-quality insulation and renewable energy installations, and we understand the complexities of working with social housing. By engaging experienced partners like us now, housing associations can mitigate the risk of delays and ensure their projects are completed to the highest standards.
How to Prepare for Wave 3
To ensure your organisation is ready for Wave 3, consider taking the following steps:
- Engage Early: Start discussions with experienced installers now to secure availability for your projects.
- Assess Your Needs: Conduct a thorough assessment of your housing stock and determine which properties will be prioritised for retrofitting under Wave 3. Companies like ours can help with this, carrying out surveys (both in-person and desktop).
- Collaborate: Work closely with your chosen installation partner to develop a clear plan that aligns with your strategic decarbonisation goals.
- Begin Resident Engagement: Engaging with residents early is crucial to ensure a smooth project rollout. Clear communication about the benefits of the retrofitting work, the expected timelines, and any potential disruptions will help manage expectations and build trust. Consider holding information sessions, providing written materials, and offering a point of contact for residents’ questions. Early engagement can lead to greater cooperation and satisfaction, ultimately making the process more efficient.
- Be Realistic About Timelines: Given the current capacity issues, realistic timelines are crucial. An experienced partner will help set achievable targets and avoid unnecessary delays.
Conclusion: Don’t Wait Until It’s Too Late
Wave 3 of the Warm Homes: Social Housing Fund (WH:SHF) represents a significant opportunity for housing associations to take meaningful steps towards decarbonisation. However, with a limited supply of experienced installers, the key to success is early engagement. By partnering with reliable and skilled teams now, you can ensure your projects are positioned for success once funding is allocated. With the Government’s Warm Homes Plan, the aim is to reduce fuel poverty and support the UK’s climate goals, which means acting now is crucial.
If you’d like to discuss how we can support your retrofitting projects, get in touch today and we can begin to get you prepared to hit the ground running, once funding and timelines are announced.
