The government has been criticised for not changing its VAT policy towards retrofitting.

In the Budget, Jeremy Hunt did not take any notice of calls to reform its VAT charges to promote retrofitting of existing buildings.

William Scoular, head of private client lending at Investec Real Estate, said: “Despite calls from the wider industry getting increasingly loud, it’s disappointing that another budget announcement has come and gone without the government addressing the highly punitive VAT policy that discourages retrofitting residential property over building new developments.

“The government’s net zero ambitions will not be met without existing real estate being modernised and this is unlikely to happen at the required volume while these financial barriers remain in place.

“Repurposing is already often more expensive than new developments, so the government should be trying to alleviate those costs and make it more attractive, given the environmental benefits of the carbon savings associated with these projects.”