A five-bedroom house in Peckham that sold last year for £1.26m will receive £100 from the government’s energy support scheme, while a two-bedroom semi in Aberdeen will not.
That is the central finding of a City AM analysis examining how Chancellor John Healey’s £2.4bn household energy package distributes its money across Britain.
The scheme pays £100 to households sitting in council tax bands D and below, a design that economists say is fundamentally flawed because property valuations have not been updated since the early 1990s.
In the three decades since those bands were set, property values in London and parts of the South East have surged while homes in former industrial towns have stagnated or fallen in real terms.
The result is that million-pound properties in Notting Hill, Primrose Hill, and leafy Twickenham qualify for the payment, whereas homes in Blackpool, Aberdeen, and Merthyr Tydfil do not.
The Peckham property at 130 Ivydale Road, which sits between Nunhead cemetery and a sports ground, features five bedrooms, three bathrooms, and an open-plan kitchen, and will receive its £100 by January.
Land Registry data shows that property prices in Peckham rose by more than 1,000 per cent in the 25 years to 2019, yet its council tax band still reflects a neighbourhood that was among the most deprived parts of the capital when valuations were last conducted.
Beyond London, a £1.3m Cotswolds property called The Haven, situated near the market town of Burford in the village of Filkins, also qualifies, with estate agent Penny and Sinclair describing it as a “superb home” in a “highly sought-after and quintessentially rural village.”
Several band-D properties on the cobbled St Petersberg Mews in Notting Hill, now estimated to be worth around £1.6m each, are similarly included in the scheme.
Meanwhile, a two-bedroom semi on Aberdeen’s Cranford Road, sitting in band E, is excluded despite being worth 89 per cent less than those Notting Hill mews houses and 86 per cent less than the Ivydale Road five-bed.
A band-E home in Merthyr Tydfil, once known as the iron capital of the world but now a town where nearly 30 per cent of residents are economically inactive, is also shut out of the payment despite being valued at just £250,000.
Arun Advani, a director of the Centre for the Analysis of Taxation (Centax), was pointed in his assessment of the scheme’s architecture: “Using 1991 house prices to target 2026 support was never going to be a good design. After the support during Covid and the 2022 energy crisis, it is a sad indictment of government that a more effective way to target relief still hasn’t been created.”
Greg Thwaites, interim chief economist at the Resolution Foundation, told his organisation’s post-Budget press conference that “a hundred pounds is nice, but the point is it’s extremely badly targeted,” adding that many recipients “can probably manage without that money — and probably need to manage without that money — if we’re going to support the people we need to support.”
Healey has defended his policy, describing it as “real help” when people “need it most,” and found an unlikely ally in Money Saving Expert founder Martin Lewis, who visited Downing Street ahead of the Budget and called the mechanism the “least worst option.”
The intervention comes ahead of an expected 27 per cent rise in household energy bills in early 2027, which analysts estimate will add roughly £300 to the average annual bill, giving the Chancellor a clear political rationale for acting.
Yet the scale of the looming price shock is precisely why critics argue the money should have been directed with greater precision, with Advani warning that the current design means “a lot of cash going to people that don’t need it, and some people who do need the support completely missing out.”
Notably, the word “targeted” appeared 30 times in the Budget document released alongside Healey’s fiscal statement, suggesting a political sensitivity around the concept that the analysis suggests the policy itself does not fully bear out.