Purpose
The purpose of this paper is to understand the distributional impact of house price increases on consumption in the context of the energy transition.

Design/methodology/approach
This study draws from two micro cross-sectional datasets, the English Housing Survey (EHS) and the Living Costs and Food Survey (LCFS) to study the Marginal Propensity to Consume (MPC) out of changes in house prices. By employing pseudo-panel regressions, the paper examines the impact of house price changes on consumption among diverse household types.

Findings
This paper finds varying consumption responses to house price changes across age and tenure groups. Older homeowners tend to increase consumption when house prices rise. In contrast, middle-aged individuals, often renters or mortgage holders, reduce consumption in response to price increases. The youngest age group also experiences increased consumption but to a lesser degree than the oldest group. Energy-efficient homes are related to lower consumption across all tenure levels. However, when interacted with house prices and age, the estimates are positive, pointing to an unequal accrual of property premiums depending on housing market positions.

Research limitations/implications
The main limitations stem from data constraints. First, using a pseudo-panel approach hinders control for unobservable selection bias. Additionally, while robust under cross-validation and specifications tests, the energy efficiency variable imputation results in a low number of energy-efficient homes. Due to heterogeneous responses to rising house prices, this paper contends that an energy transition model that subsidises homeowners’ renovation is likely to produce a negative impact on consumption among younger and middle-aged households.

Originality/value
This paper contributes to the MPC literature by incorporating energy efficiency as a key variable. It draws from recent data to obtain new estimates. By highlighting shifts in consumption patterns the paper contributes to a well-established body of literature with renewed policy relevance regarding housing retrofit.@en

Despite persistent housing affordability issues, energy policy and housing renovation are usually investigated separately from housing costs other than energy. Researchers have examined the financial viability of renovation attending to building conditions and the socio-economic characteristics of their occupants. However, the distributional impacts of renovation incentives and the potential of fiscal policy to redistribute housing costs remain understudied. Dutch fiscal policy, favouring homeownership, offers a relevant context to evaluate how property taxation can boost renovation rates. The novelty of this paper resides in investigating the impact of two policies, the current direct subsidy and a proposal for a green tax, on both the financial viability of renovation and the subsequent distribution of housing costs. The proposed green tax combines energy efficiency and taxation of property revenue. We employ a model considering marginal costs of housing renovation, obtained from a government dataset, and marginal benefits, drawn from a hedonic regression. We assess the distributional impacts of different policy scenarios by examining changes in user costs across income deciles. Our findings indicate that existing renovation subsidies exacerbate the regressive distributional impacts resulting from the current housing taxation system in the Netherlands. Introducing energy-efficiency-linked property taxation can make homeownership fiscality less regressive while incentivising housing renovation. Ultimately, this study highlights the importance of incorporating housing affordability as a fundamental element in renovation policies to balance environmental and distributional objectives.@en

The regulation of financial markets according to Environmental, Social and Governance (ESG) criteria has become a priority for the European Union (EU). Recent legislation, such as the EU Green Taxonomy, aims to identify sustainable investments enhancing transparency and accountability while steering private finance toward environmental objectives. The introduction of ESG criteria poses specific questions for Social Housing Organisations (SHOs), particularly as the decarbonisation of the housing stock is also incorporated into national legislation. This article contributes to the social housing finance literature by breaking ground on ESG, an area of intensive legislative activity currently re-shaping financial markets. The study draws from interviews with SHOs’ finance directors, banking officers, rating agencies and public officials to answer the question: How does the introduction of ESG legislation affect the financing of social housing decarbonisation? First, the results show that ESG legislation is broadening reporting responsibilities while producing only limited additional finance ultimately geared towards large and commercially oriented SHOs. Second, the expansion of energy-efficiency requirements is resulting in higher costs creating tensions with SHOs’ social mission of building homes at affordable rents. Third, the adoption of ESG financing is producing inequalities in access to capital across national financing systems and individual providers.

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The energy transition across Europe’s built environment will probably be one of the main financial challenges of the coming decades. Renovating the social housing stock to attain the built fabric standards introduced in the European Directive on Energy Performance of Building (EPBD) will require the mobilisation of both public and private funding as envisioned by the European Commission in the Renovation Wave. In this landscape of increased investment needs, Environmental, Social and Governance (ESG) standards have risen to a prominent position as the main indicators of sustainable investment. While ESG-earmarked funds have grown significantly in the last years, there is widespread concern about the real impact of ESGfunded projects and whether these are in fact bringing additional investment into key transitional activities such as the renovation of the social housing stock. This project poses two questions, first, How does ESG funding interlock with the renovation strategies of social housing providers? And second, How do institutional factors affect the uptake of ESG funding? To answer these questions, this project draws from semi-structured interviews with finance officers from housing providers across six European countries with large social housing stocks: Austria, Germany, The Netherlands, France, Sweden, and the UK. The main objective of this paper is to critically assess the contributions of ESG funding to the energy transition and contextualise it within traditional forms of private and public financing of social housing.@en

The Renovation Wave is the latest addition to a series of European measures designed to incentivise investment in a low-carbon built environment. In terms of residential retrofits, research has focused on how structural measures can reduce costs through energy savings and improve affordability in the long term. However, it is less clear how retrofit policies can positively impact households with different income levels, energy costs and savings' opportunities across time. EU Member States have provided substantial funding for retrofitting in the form of grants, subsidised loans and tax deductions. This paper addresses with the Netherlands as case study the question: how do different retrofit measures affect the finances and affordability of homeowners in the short and longer term? Our numerical analysis is mainly based on the WoON 2018 dataset, a household-level survey. By focusing on household finances under different financing schemes, this paper aims to place renovation measures in the context of the housing affordability literature. User costs are one of the most important capital-based indicators of long-term affordability. In contrast, cash flows deal with the exchange of money and indicate financial access to housing at a given point in time. In the Dutch context of rising house prices, it is crucial to measure the short and long-term economic impact of energy efficiency measures, as they are likely to have a lasting impact on affordability. Our results show that depending on policy, a majority of homes could be retrofitted with a cost-neutral margin, depending on energy prices and post-retrofit savings. The main barrier to retrofitting is the upfront cost, which threatens short-term affordability. Loans, either subsidised or private, offer an alternative to upfront costs but reduce cost-neutrality. On the other hand, from a user cost perspective, retrofitting lowers costs in the long run. Finally, a cluster analysis shows that middle and higher income groups would be most likely to benefit from retrofitting. This raises the question of the regressive nature and targeting of flat-rate subsidies and tax deductions.

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