The Warm Homes Loan Scheme is designed to encourage lenders to offer affordable finance for energy-efficient home improvements. Unlike traditional government grant schemes, the Warm Homes Loan Scheme does not provide money directly to homeowners. Instead, it supports participating lenders, enabling them to develop loan products that could make green home improvements more affordable.

Understanding how the scheme works is important because the current application process is aimed at lenders rather than individual consumers.

How Does The Warm Homes Loan Scheme Operate?

The scheme is administered by the Department for Energy Security and Net Zero (DESNZ).

Rather than issuing loans itself, the government invites eligible lenders to apply to participate in the scheme. Successful lenders can then enter into a Grant Funding Agreement with DESNZ before launching approved loan products.

The aim is to increase the availability of affordable finance for improvements that reduce household energy use and carbon emissions.

The Warm Homes Loan Scheme Process

Stage
What Happens?

1
Government invites lenders to participate.

2
Lenders submit applications to DESNZ.

3
Successful lenders enter into a Grant Funding Agreement.

4
Approved lenders develop consumer loan products.

5
Consumers may apply directly with participating lenders once products become available.

Can Homeowners Apply Directly?

No.

At the time of writing, homeowners cannot apply directly to the government for a Warm Homes Loan. The scheme is currently focused on recruiting participating lenders.

Read more in our guide to Who Is Eligible For The Warm Homes Loan Scheme?.

Who Will Offer Warm Homes Loans?

The government expects authorised lenders to develop loan products under the scheme.

These could include banks, building societies or specialist finance providers that successfully complete the government’s approval process.

The specific lenders participating in the scheme will become known once approved products are launched.

What Improvements Could Be Financed?

The government has indicated that Warm Homes Loans are intended to support low-carbon home improvements.

Potential improvements include:

  • Solar photovoltaic (PV) panels
  • Battery storage systems
  • Air source heat pumps
  • Ground source heat pumps
  • Other eligible energy efficiency improvements

Find out more in Which Home Improvements Could Be Covered?.

How Is The Warm Homes Loan Scheme Different From A Grant?

Warm Homes Loan Scheme
Government Grant

Repayable loan
Non-repayable funding

Provided by participating lenders
Provided through government grant schemes

Subject to lender terms
Subject to grant eligibility rules

If you are comparing funding options, also read Warm Homes Loan Scheme vs Boiler Upgrade Scheme and Warm Homes Loan Scheme vs ECO4.

Frequently Asked Questions

Who currently applies to the Warm Homes Loan Scheme?

The current application process is for lenders wishing to participate in the scheme.

Will homeowners apply to the government?

No. If consumer loan products become available, applications are expected to be made through participating lenders rather than directly to the government.

When will Warm Homes Loans become available?

This will depend on when participating lenders launch approved loan products.

Read more in When Will Warm Homes Loans Be Available?.

Additional Reading