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This one issue is adding £350 to your energy bills

energy bills  EMBARGOED TO 0001 WEDNESDAY OCTOBER 12 File photo dated 19/08/14 of a view of houses in Thamesmead, south east London, as homeowner anxiety about house values has cancelled out any reassurance from the Government's freeze on energy bills to drag down consumer confidence for another month, a survey suggests.
Leaky walls will add an extra £350 to energy bills between January and April. Photo: PA (PA)

Leaky walls will add an extra £350 to energy bills between January and April, with four-in-10 homes in England ⁠— 9 million homes in total ⁠— suffering from the problem.

The Resolution Foundation said leaky walls are the biggest challenge for England’s energy efficiency drive, but poorer UK households are simply unable to address it without state support.

The cost of wall insulation averages £8,000, and it can take 18 years to recoup upfront costs.

Read more: Who can benefit from the £1bn scheme for energy bills help?

The think tank said the cost of poorly insulated homes would become obvious to families this winter ⁠— with the cost of heating a home with poor quality walls likely to be around £350 higher than one with wall upgrades, just between January and April next year.

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The report by the Resolution Foundation also said that leaky homes are often concentrated in less affluent neighbourhoods.

The government energy price guarantee at its current level expires in April 2023 (Yahoo News UK/Flourish)
The government energy price guarantee at its current level expires in April 2023. Chart: Yahoo News UK/Flourish

“Previous approaches such as cheap loans have failed to deliver improvements at scale, and the biggest barrier to energy efficient homes has been largely ignored: our leaky walls. The sheer cost of insulating Britain’s walls means that the state cannot be expected to foot the bill entirely,” Jonny Marshall, senior economist at the Resolution Foundation, said.

“Instead, a new carrot and stick approach is needed to ensure that England’s 9 million leaky homes are upgraded. Mandating that all homes must be energy efficient by 2035 can spur home-owners and landlords into action, while a new means test could help around half of households with at least some of the costs of the upgrades, crucially covering all of the costs for those with the lowest means,” he added.

The think tank is calling on the government to combine targeted financial help for home improvements with a ban on poorly insulated homes by 2035.

A means test that takes account of households’ income and assets in order to determine eligibility, such as the one used in social care, could be used to determine who receives access to state support, it said.

According to the report, setting a ceiling for support for households with £250,000 of assets (such as property wealth), and a floor below which the state pays for households with assets under £100,000 and incomes under £30,000, would mean that around half of home-owners would pay in full for home insulation, around one-in-10 would have their costs fully covered by the state, and the remaining two-in-five would receive a sliding scale of state support.

Read more: Energy firms accused of failing struggling customers ahead of 'challenging winter'

This would push around three quarters (71%) of the costs onto property owners, requiring up to £1.8bn per year of state funding over the next decade.

The "stick" should be a new regulation setting a hard deadline for homes to meet energy efficiency standards. The Resolution Foundation said the government should mandate that all homes must be at least EPC C rated for energy efficiency by 2035.

“England’s homes have as large a carbon footprint as our petrol and diesel powered cars. The key policy task for the 2020s is finding a way of decarbonising millions of homes without leaving poorer households behind or burdening them with unaffordable costs,” Marshall added.

Watch: Why are gas prices rising?