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Nieuws | Demand for credits for energy renovation drops significantly

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Demand for credits for energy renovation drops significantly

Demand for credits for energy renovation drops significantly

 

Demand for credits for energy renovation has fallen sharply in recent months. In the first quarter of this year, 51 per cent fewer credits were taken out than during the same period in 2023, according to figures from the Professional Credit Association (BVK). A total of 7,852 consumer loans for energy renovation purposes were taken out, with a total value of 167 million euros, representing a drop of almost 40 per cent. 

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According to the BMS, which represents 95 per cent of the Belgian credit market, this decline is due to several factors. Rising interest rates make borrowing more expensive, while rising prices of building materials make renovation plans more difficult. In addition, energy prices have fallen significantly, reducing the urgency for energy-saving measures.

 

Urgent need for action

 

Bart Vervenne, chairman of the BMS board of directors, highlights the problematic aspects of the decline in renovation loans. ‘Less than 10 per cent of homes meet the 2050 energy targets, and we are only meeting a third of the required renovation rate,’ Vervenne says. ‘A massive renovation wave in 10 to 15 years will lead to scarcity of building materials, manpower and financing. The only way to improve the energy performance of our housing stock is to proceed gradually and take action now.’

 

Changes in financial support

 

Energy renovation of a home is compulsory for anyone buying a home in Flanders with an EPC label E or F; within five years the energy level must be raised to at least label D. Until 2022, renovation loans could be taken out with interest fully repaid by the Flemish government. Since 2023, this has been replaced by an interest subsidy offering a discount on the interest rate. This system expires at the end of this year and no new plans for further support have yet been announced.

 

Efficiency and social impact of energy renovations

 

Energetic renovations should be targeted and ambitious, with an eye for material use and social impact, argues Nathan Van den Bossche, professor of construction engineering at UGent, in an opinion piece in De Tijd. Energy renovations reduce energy consumption, increase living comfort and home value, but the efficiency and social impact of the renovation requirement raise questions. 

Realistic savings and environmental impact

 

Research at Ghent University shows that poorly insulated houses often use less energy than expected due to thrifty behaviour of residents. As a result, energy renovations often yield lower savings than theoretically calculated. Moreover, renovations require a lot of materials, which has a significant environmental impact. Buildings account for 40 per cent of energy use, and the construction sector contributes to 40 per cent of new material flows and 38 per cent of all waste. So it is not obvious to renovate all buildings to label A quickly.

 

Social implications and necessary choices

 

Energy renovations also have social implications. While upgrading and improving homes is desirable, the high cost of renovations can push people out of the housing market. Prospective buyers take renovation costs into account, making cheaper homes less attractive and reducing the share of owners in this segment. Affluent people benefit from premiums for energy renovations, while less affluent buyers are left out.

 

Need for targeted approach

 

To meet climate ambitions, 3 per cent of all homes need to be thoroughly renovated every year, while 1 to 1.5 per cent is probably the macroeconomic upper limit. Therefore, we need to make choices. Targeted measures such as post-insulating cavity walls and installing heat pumps can be more efficient. We need to use materials, contractors and subsidies where they have the most impact, taking into account circular material use and eco-friendly materials. Our renovation ambitions should go beyond EPC scores and include social corrections. 

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