SHDF and Asbestos: What Social Housing Providers Need to Know

What is the Social Housing Decarbonisation Fund?

The Social Housing Decarbonisation Fund (SHDF) is a UK Government programme administered by the Department for Energy Security and Net Zero (DESNZ) and delivered by Salix Finance. Its purpose is to upgrade the energy performance of social housing in England, with the target of bringing as many homes as possible up to Energy Performance Certificate (EPC) Band C by 2030.

The fund has been delivered in waves. Wave 1 was a demonstrator phase. Wave 2, the main delivery phase, has been split into Wave 2.1 (£778 million allocated in March 2023) and Wave 2.2 (an additional £80 million awarded from April 2024). In total, the SHDF represents over £1.04 billion of government grant funding, with further co-funding contributions from grant recipients.

According to the most recent DESNZ statistics published in January 2026, the programme has upgraded around 54,900 homes across Waves 1, 2.1, and 2.2 to the end of November 2025. Approximately 113,900 individual energy efficiency measures have been installed across those homes, including insulation, windows and doors, heating systems, and electricity-related measures such as solar panels.

The most common measure types under SHDF have been insulation (accounting for around 44% of Wave 2.2 installations), electricity-related measures such as solar PV (27%), and window and door replacements (13%). Almost 100% of upgraded homes have achieved EPC Band C or above.

Why asbestos surveys are mandatory before SHDF retrofit work

The vast majority of social housing stock targeted by the SHDF was built before 2000. Until the UK ban on all forms of asbestos took full effect in 1999, asbestos-containing materials (ACMs) were routinely used in residential construction. They can be found in wall cavities, loft spaces, soffits, window cills, textured coatings, floor tiles, pipe lagging, boiler flues, and many other locations throughout a typical social housing property.

The SHDF asbestos survey requirement exists because every major retrofit measure — external wall insulation, internal wall insulation, cavity wall insulation, loft insulation, window replacement, heating system upgrades — involves disturbing the building fabric in areas where ACMs are commonly present. Drilling into walls, lifting floorboards, stripping soffits, removing window frames, and accessing loft spaces all carry a risk of disturbing asbestos if it has not been identified and managed first.

Under Regulation 7 of the Control of Asbestos Regulations 2012 (CAR 2012), no employer may carry out demolition or refurbishment work on premises unless they have established whether asbestos is present. This is a strict legal requirement — not a recommendation. A suitable and sufficient asbestos survey must be completed before refurbishment work begins. For social housing providers, this means that every property in an SHDF programme must have an appropriate asbestos survey before retrofit contractors set foot on site.

Failure to survey carries serious consequences. The Health and Safety Executive (HSE) can issue improvement or prohibition notices, and prosecutions for breaches of CAR 2012 can result in unlimited fines. Beyond the legal risk, disturbing unidentified asbestos puts residents, operatives, and the wider community at risk of exposure to asbestos fibres — a known cause of mesothelioma, asbestosis, and lung cancer.

Types of asbestos survey needed for SHDF works

There are two main types of asbestos survey in the UK, and understanding which one your SHDF programme requires is essential for planning, budgeting, and procurement. For a detailed explanation of both survey types, see our guide to asbestos survey types.

Which SHDF measures trigger which survey type?

In practice, most SHDF programmes involve multiple measures per property, which means the R&D survey should cover the full scope of planned works. It is far more cost-effective to commission a single comprehensive survey than to carry out separate surveys for each measure.

What happens when asbestos is found?

Finding asbestos during a pre-retrofit survey is common — not exceptional. In pre-2000 housing stock, it would be unusual not to find at least some ACMs. The question is not whether asbestos will be found, but how to deal with it efficiently within the constraints of the SHDF programme.

When the survey identifies ACMs in areas where retrofit work is planned, there are three broad options:

Impact on retrofit timeline and budget

Asbestos removal adds time and cost to the retrofit programme. The 14-day HSE notification period alone means that licensed removal work cannot begin immediately after the survey. Once removal is complete, the four-stage clearance process adds further time before retrofit work can start. For large-scale SHDF programmes, this can significantly affect the critical path if asbestos management is not planned into the programme from the outset.

Housing providers should budget for asbestos survey and removal costs as a standard line item in their SHDF programme. Typical costs include the R&D survey fee (often £300–£600 per domestic property), removal costs (variable depending on the type and quantity of ACMs), and any associated making-good works. For a social housing property with typical ACMs such as textured coatings, AIB panels, and pipe lagging, removal costs can range from £1,000 to £5,000 or more per property, depending on the extent of contamination.

Wave 2.2 requirements and timeline

SHDF Wave 2.2 awarded approximately £80 million of grant funding to 42 councils, housing associations, registered providers of social housing, and charities across England. Wave 2.2 was targeted at organisations that did not receive funding under Wave 2.1.

The delivery window for Wave 2.2 runs to 31 March 2026. All grant funding had to be transferred and spent by 31 March 2025, with only co-funding permitted in the final 12 months of delivery. Successful grant recipients are expected to have spent a minimum of 25% of co-funding by 31 March 2025, with the remainder by 31 March 2026.

As of November 2025, Wave 2.2 had delivered around 7,700 measures in 3,600 households, based on returns from 38 grant recipients. Wave 2.1 had delivered approximately 74,400 measures in 35,200 households over the same period.

For housing providers still delivering under Wave 2.2, the tight timeline makes early asbestos surveying critical. Any delay in identifying and removing ACMs will compress the window available for retrofit installation. Providers who have not yet completed their asbestos surveys should treat this as an urgent priority to avoid programme slippage and potential clawback of unspent funding.

Procurement considerations

For social housing providers managing SHDF programmes at scale, the procurement of asbestos survey and removal services requires careful planning. The volumes involved — potentially hundreds or thousands of properties — mean that standard ad-hoc procurement is unlikely to deliver value for money or the speed needed to meet programme timelines.

Volume survey contracts

Housing providers should consider procuring asbestos survey services on a volume contract basis. This allows surveys to be batched by area, property type, or retrofit phase, reducing mobilisation costs and enabling a factory approach to survey delivery. Many UKAS-accredited survey firms offer volume pricing for social housing programmes, with per-property rates significantly below one-off survey fees.

When procuring survey services, ensure that your specification requires UKAS accreditation to ISO 17020 for the survey firm, and that the survey scope is explicitly linked to the planned SHDF measures for each property. A survey that does not cover the areas where retrofit work is planned will need to be repeated, wasting time and money.

Using HSE-licensed contractors

Where surveys identify ACMs that require removal, the removal must be carried out by a contractor holding a current HSE asbestos licence (for licensable materials) or by a competent contractor for non-licensable work. Housing providers should have a framework or call-off arrangement in place with one or more licensed removal contractors before surveys begin, so that removal work can be mobilised quickly when needed.

You can verify that a contractor holds a current HSE asbestos licence by checking the HSE's public register of licensed contractors, or by using our contractor search tool to find verified contractors near your stock.

Coordination with retrofit contractors

The most effective SHDF programmes integrate asbestos management into the retrofit delivery programme from day one. This means appointing a PAS 2035 retrofit coordinator who understands asbestos obligations, sequencing surveys to run ahead of the retrofit installation schedule, and building asbestos removal lead times into the programme plan.

A common mistake is to treat asbestos surveying as a separate workstream that can be dealt with in parallel. In practice, the survey must be completed and any necessary removal work finished before the retrofit contractor can access the property. If the survey identifies unexpected ACMs that require licensed removal, the resulting delay can cascade through the entire programme schedule. Early surveying and realistic contingency planning are essential.

Getting your SHDF programme started

If you are a social housing provider planning or delivering an SHDF retrofit programme, the first step is to understand the asbestos status of every property in your programme. Commission refurbishment and demolition surveys for all properties where retrofit work is planned, scoped to cover the specific measures you intend to install.

For more information on the legal framework, see our guide to the duty to manage asbestos. For a detailed comparison of survey types, see our guide to asbestos survey types.