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RICS urges new chancellor to slash VAT on refurbishment work

Retrofirst demands all
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The RICS has echoed one of the demands of the AJ RetroFirst campaign by urging new chancellor Rishi Sunak to slash VAT on refurbishment work to 5 per cent

In a ‘wish-list’ released yesterday (17 February) and submitted to the government ahead of next month’s Budget, the RICS said reducing the VAT rate on home improvement work to 5 per cent ‘could provide a needed boost in the adoption of retrofitting measures being taken in tandem with home improvement upgrades across the UK’.

Pointing out that an estimated 70 per cent of the country’s existing buildings would still be in use in 2050, the RICS said it was ‘critical’ that the energy performance of existing homes was transformed and called on the government to make this a national infrastructure priority ‘with appropriate long-term investment’.

Its wish-list also included greater support for modern methods of construction (MMC) and action on tackling the gender pay gap in construction and property in tandem with industry leaders.

In the section on ‘decarbonising existing housing’, the RICS complained that progress in this area had been ‘limited’ despite the built environment’s huge contribution to global warming.

‘Domestic buildings are responsible for nearly a fifth of the UK’s carbon emissions and, as such, should be the focus of government policy priorities,’ the submission said.

‘Government must commit to sustained funding and a package of financial incentive mechanisms for retrofitting across both low income and “able to pay” households, drive standards and regulation, and support industry in delivering the robust pipeline of skills required to undertake this challenge.’

The submission revealed that the RICS’s residential market survey, carried out in December, had found more than half of respondents predicted that reducing VAT on refurbishment would boost the energy efficiency of homes.

It added: ‘To fully decarbonise built assets and achieve net zero, both the operational and embodied carbon over the whole life of the asset must be addressed.

‘Retrofitting provides an opportunity to achieve significant embodied carbon savings through reuse rather than rebuild.’

In a separate report released last week, consultant WSP also made the case for a mass retrofit drive and attacked the ‘throw-away’ culture of demolish-and-build-again.

‘We know existing homes and offices are a major source of emissions. But they’re also valuable assets,’ said WSP’s head of building services, Nick Offer.

‘If we want to achieve a more responsible, climate-friendly society, demolishing properties and replacing them with more sustainable ones doesn’t add up. It’s not cost-effective, and doesn’t fit with our aspirations to nurture a circular economy that minimises the impact of building materials and construction processes on the environment.’

The report, Rethink Retrofit, also called for the integration of natural materials into building retrofits as well as ‘smart systems’ based on the Internet of Things to control features such as lighting and temperature.

WSP’s report was based on a survey of 103 UK architects, property developers and public and private-sector building administrators.

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Readers' comments (1)

  • In both of my two terms as RIBA President 1981-83 and 1995-97 I was campaigning for the VAT on repairing and renovating existing buildings to be removed - particularly with listed buildings. Even then it was absurd government policy to tax repairs and renovations and make them more expensive when policy should be to encourage repair and retention and not demolition and redevelopment. That applied then and even more now 25 years later. The new Chancellor has the option to put right an absurd political and economic policy. Owen Luder CBE PPRIBA

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