How Councils Are Funding Retrofit Projects in 2026

Across the UK, retrofit is becoming one of the most important priorities for local authorities. Councils are under increasing pressure to reduce carbon emissions, tackle fuel poverty, and improve the performance of ageing housing stock.

To support this transition, the UK government has introduced several funding programmes that allow councils and housing providers to upgrade homes with insulation, low-carbon heating and other energy efficiency measures. In 2026, most publicly funded retrofit projects are being delivered through a small number of key national schemes.

Understanding how these programmes work is essential for landlords, housing providers and contractors looking to participate in council-led retrofit projects.

The Warm Homes Plan: The Government’s Main Retrofit Strategy

The largest national framework shaping retrofit funding today is the Warm Homes Plan. Announced in 2026, the programme aims to upgrade millions of homes across the UK through a combination of public investment, local authority programmes and private finance. The plan includes £15 billion of government funding and is designed to help improve the efficiency of up to five million homes while cutting energy bills and carbon emissions.

Rather than being a single funding scheme, the Warm Homes Plan acts as an umbrella strategy that brings together several retrofit programmes delivered through councils, housing providers and energy suppliers.

For local authorities, this means funding is typically accessed through specific grant programmes rather than through a single national application route.

Read the full document here.

Warm Homes: Local Grant

Another key funding route in 2026 is the Warm Homes: Local Grant, which enables local authorities to deliver energy efficiency upgrades to low-income households.

This programme is aimed primarily at homes with EPC ratings between D and G, and typically funds measures such as insulation, solar panels and low-carbon heating systems. Local authorities manage the delivery of upgrades directly within their communities, targeting areas with high levels of fuel poverty.

The scheme has received £500 million of government funding, with councils responsible for identifying eligible properties and delivering the retrofit works.

This programme often includes privately rented homes, which means landlords may benefit where tenants meet eligibility criteria.

Supplier-Led Schemes and Additional Funding

Alongside government grants, councils frequently combine multiple funding sources to deliver retrofit projects.

Some of the most common include:

Energy Company Obligation (ECO): Energy suppliers are required to fund energy efficiency improvements for vulnerable households. These measures often include insulation and heating upgrades and are delivered in partnership with local authorities.

Great British Insulation Scheme: This programme focuses on improving insulation in less energy-efficient homes to reduce heat loss and energy bills.

Boiler Upgrade Scheme: Provides grants to replace fossil fuel heating systems with low-carbon alternatives such as heat pumps.

In many cases, councils combine these schemes with their own budgets or developer contributions to fund larger retrofit programmes.

Why Retrofit Projects Require a Coordinated Approach

While funding availability has increased, delivering successful retrofit projects remains complex.

Councils must ensure projects meet strict requirements including:

• PAS2035 retrofit standards

• procurement rules and funding conditions

• planning requirements for external works

• monitoring and reporting of carbon savings

Without proper planning and design, projects can quickly encounter delays, cost overruns or compliance issues.

For this reason, many local authorities partner with specialist retrofit consultants and designers to help plan, coordinate and deliver projects.

What This Means for Landlords and Contractors

For landlords, housing providers and contractors, the increase in retrofit funding presents a significant opportunity.

Local authorities across the UK are actively seeking partners who can help deliver:

• retrofit assessments and surveys

• compliant retrofit design

• planning applications

• project coordination and delivery

However, accessing these programmes often requires technical expertise, evidence-based design and a clear understanding of compliance requirements.

Final Thoughts

Retrofit funding in 2026 is becoming more structured and more ambitious than ever before. Programmes such as the Warm Homes Plan and the Warm Homes: Social Housing Fund are enabling councils to upgrade thousands of homes while reducing energy bills and emissions.

For landlords and housing providers, the key to unlocking these opportunities is preparation. Understanding funding routes, developing compliant retrofit strategies and building strong delivery partnerships can make the difference between securing funding and missing out.

Target Green works with councils, housing associations and landlords to design and deliver compliant retrofit projects. From retrofit assessments and planning support to full PAS2035 design and coordination, our team helps turn funding opportunities into successful projects.

If you are planning a retrofit programme or exploring funding opportunities, feel free to get in touch.