Home Upgrade Grant (HUG2): what replaced it, and the re-treatment rule

The short history

Before the Warm Homes: Local Grant, councils in England delivered energy upgrade grants for low-income households through a series of schemes:

By the end of June 2025, LAD phases 1 to 3 and HUG phases 1 and 2 together had reported 106,000 measures in 74,400 households. HUG2 alone reported 21,900 measures in 11,800 households. DESNZ’s August 2025 statistics said HUG2 had closed, with only small revisions expected.

What the Warm Homes: Local Grant changed

The policy guidance says lessons from LAD and HUG were “fully integrated” into the new scheme, and it lists the main differences:

• All fuel types. LAD3 covered only on-gas homes and HUG only off-gas homes. The Warm Homes: Local Grant covers both, as a “single successor scheme” that simplifies the landscape.
• Twin cost caps. A separate pot for energy performance and for low carbon heating, now £16,600 each per home on average. HUG2’s “EE top up”, which let unspent insulation money cover expensive heat pumps, is not available.
• Postcode route narrowed. HUG2’s postcode route covered income deciles 1 to 3; the new scheme uses deciles 1 and 2 only, because it covers a much larger group of on-gas homes.
• More generous to landlords. One rented home fully funded per landlord, then 50%, with no cap on how many homes a landlord owns (HUG2 had one).
• No cap on EPC D homes, unlike LAD3.
• Simpler funding. An expression of interest model rather than competitive bidding, and a streamlined batch system for drawing funds.
• Free technical support for councils through RISE (Retrofit Information, Support and Expertise), previously called the Home Upgrade Hub.

Homes treated under HUG or LAD: the re-treatment rule

A home that received funded upgrades under HUG (phases 1 or 2) or LAD (phases 1 to 3) can be treated again under the Warm Homes: Local Grant if the household and home meet the current rules. But the new work must either:

• bring the home to EPC band C, or
• include low carbon heating in the package.

Homes treated under other schemes, such as ECO, do not face that condition. In every case, the same individual measure cannot be funded twice: a wall insulated under HUG cannot be insulated again with this grant.

If you applied under HUG2

Councils that were delivering HUG2 could transfer relevant paperwork and contracts to the Warm Homes: Local Grant to keep delivery going. If you were in the middle of a HUG2 application when it closed, ask your council whether it moved across. If you are starting fresh, the process is the same as for anyone else: check eligibility, then apply.

What comes after the Local Grant

The Warm Homes Plan says the government intends, from 2027/28, to integrate the Warm Homes: Local Grant and the Warm Homes: Social Housing Fund into a single low-income capital scheme that shifts towards area-based delivery. The current scheme’s delivery window runs to 31 March 2028. Timescales and what changes.