The Liberal Democrats have warned that homeowners who already face rising mortgage costs could now face bills of up to £20,000 to upgrade their homes with green insulation and heat pumps.

New government statistics scrutinised by the Lib Dems, show the government’s flagship green home upgrade programme has helped just 15,000 low-income households improve their insulation.

The Green Homes Grant was launched last year promising to upgrade 600,000 homes, but was scrapped in March.

The new stats come as the government unveiled plans for homeowners to pay for green upgrades themselves, after announcing plans to impose energy performance targets on mortgage lenders.

The new plan for home insultation, part of the Heat and Building Strategy, has been criticised in many quarters for potentially leaving homeowners paying up to £20,000 extra on their mortgages to pay for upgrades.

The Liberal Democrats are calling for homeowners to receive an income tax rebate to help pay for green home upgrades, instead of increasing the costs of a mortgage.

Wera Hobhouse MP, the Liberal Dems’ spokesperson for energy and climate change, said: “There is now a green mortgage ticking time bomb after this latest government failure. Homeowners face a double whammy because this government seems incapable of helping people with vital green upgrades.  With mortgage rates already rising, this is the last thing homeowners need.

“We are in the midst of a cost of living crisis but the Conservatives appear completely out of touch if they want to pile even more costs onto innocent homeowners. There should be no trade off between saving the environment and saving people money on their bills. We know home insulation is not only the easiest way to only cut energy bills, but also to reduce the UK’s emissions, yet this government is committing a huge green home failure that future homeowners could pay the price for. We should be encouraging homeowners to make the switch with tax rebates, not eye watering bills which only the wealthy can afford.”