Renew, Kier, Keller Shares Surge After the Announcement of Green Homes Grant

Summary

• The UK government has launched a scheme, Green Homes Grant, for the benefit of homeowners and residential landlords
• According to the government directive, the voucher covers costs including the expenses related to labour and materials and the applicable VAT
• The companies providing the installation services are likely to stay in focus in the near future

The UK government has launched a scheme, Green Homes Grant, for the benefit of residents under which the state has offered to cover up partial costs for the homeowners or residential landlords with the Green Homes Grant voucher. The government has intended to contribute towards the cost of installing certain improvements at the houses pertaining to energy efficiency. The residential landlords and homeowners who are looking forward to availing the voucher under the Green Homes Grant scheme are necessarily required to ensure that all the improvements should be completed on or before 31 March 2021.

The Green Homes Grant scheme

According to the government’s notified details of the Green Homes Grant scheme, the residential landlords and the homeowners will be able to cover up to two-thirds of the cost of improvements done in their respective homes by using the vouchers provided. The landlords and homeowners who wish to receive the benefits of Green Homes Grant scheme are mandatorily required to be the residents of England.

The landlords and homeowners are required to fulfil certain other mandated eligibility conditions as prescribed by the government. The vouchers extended Green Homes Grant scheme can cover a maximum cost of up to £5,000.

The maximum value of vouchers can go up to £10,000 if the person resides in the house or some other members of the household receive some definite benefits. As per the government’s order, landlords are not entitled to receive the benefits of low-income support.

Terms of Eligibility

For availing the benefits under the Green Homes Grant scheme, the England-based homeowners and landlords should have their own house or a park home on a residential site, or the individual should be a residential landlord in a private or social rented sector. The definition of a homeowner includes long-leaseholders, shared ownerships, gypsy & traveller sites. The Green Homes Grant scheme is not available for the homes that are recently built and haven’t been occupied previously.

The improvements that are required in the houses can include installations of low-carbon heating equipment to lower the quantum of carbon dioxide produced by the homes or the reductions of energy-usage by insulating homes. The vouchers issued under the Green Homes Grant scheme can be used for primary, as well as secondary measures with a mandate to utilise it for at least one primary measure if availed.

Applicable Usage of Vouchers

According to the government directive, the voucher covers costs including the expenses related to labour and materials and the applicable VAT; however, other additional works are likely to be covered under the voucher if the corresponding requirement is mandatory for the installation of measures. Only the respective installers and the service providers can start the work after successful issuance of a voucher, members of the family or the concerning household are not authorised to complete the task by themselves after receiving the voucher.

The eligible homeowners and landlords can redeem the vouchers issued under the Green Homes Grant scheme only after confirming that the installation or the required work was “satisfactorily” finished before the expiry of the voucher. To redeem the Green Homes Grant scheme vouchers, the individuals are also required to furnish the requisite documents from the service providers including the part of payments made to the providers, wherever applicable, with regard to their share. Other than this, a copy of the invoice issued by the pertinent installer or the service provider will be needed.

The concerned service providers can ask for a proportionate deposit, not exceeding the amount they charge usually but it should be capped below the expected contribution of the homeowners or landlords for the respective services. However, the service provider is not allowed to ask for a deposit if in case the Green Homes Grant voucher is availed under low-income scheme until and unless the price of services exceeds £10,000.

Let us have a lens through some companies’ share price performance who are in the business of home improvement and providing related services.

The share price of Renew Holdings plc, Kier Group plc, and Keller Group plc started moving higher on 30 September 2020 itself with the announcement.

Renew Holdings Plc (LON:RNWH)

The shares of the Yorkshire-headquartered engineering & construction services firm Renew Holdings plc on 1 October 2020 at the time of reporting, amassed a gain of nearly 3.3 per cent to a day’s high of GBX 470 from the previous close of GBX 455,

Kier Group plc (LON:KIE)

The share price of Sandy-based construction and real estate company Kier Group plc on 1 October 2020 at the time of reporting was higher by as much as 4.5 per cent to a day’s high of GBX 50.2 from the previous day’s closing price of GBX 48.7.

Keller Group plc (LON:KLR)

The stock of the London-headquartered Keller Group plc on 1 October 2020 made an early morning gain of 4.75 per cent to an intraday high of GBX 618 after opening lower at GBX 590, was down by 3.3 per cent at the time of reporting at GBX 607.00 from the previous closing of GBX 609.

The broader benchmark FTSE 100 traded higher at 5,908.74, up 42.64 or 0.73 per cent from the previous closing of 5,866.10, at the time of reporting on 1 October 2020 after making a day’s high at 5,925.77, up 1.02 per cent and an intraday bottom at 5,866.10 on the London Stock Exchange.

With the launch of the government-aided Green Homes Grant scheme, a large section of England-based homeowners and residential landlords are likely to avail the voucher benefits. Following this, there is a high likelihood of people seeking service providers for the installations of various insulations including the solid wall, loft, flat roof or insulating a park home itself.

Other services that may see a spike are installation of air source heat pump or ground source heat pump for lowering carbon heating; draught-proofing, glazing on windows and installation of hot water tanks etc. Therefore, the companies providing these services are likely to stay in focus in the near future.