How new build homes are saving families ￡￡￡s in energy bills

The Home Builders Federation (HBF) has published a new report which found buyers of new build homes are saving ￡2,000 a year in energy bills. The ‘Watt a Save’ report explores the energy efficiency of new homes and the action the home building industry is taking to reduce its carbon footprint.

Increasing energy awareness

Despite government intervention, energy bills have risen by 80% in 2022 and forecasters predict more significant hikes are to come as the universal energy price cap ends in 2023. This coupled with mounting pressure on the climate and the rise of the environmentally-conscious consumer means that the energy efficiency of homes is more of an issue than ever before.

The new build industry is committed to reducing emissions and improving the efficiency of homes. Developers continue to take advantage of new environmentally-friendly processes, technologies and materials, and adhere with evolving regulations that support government’s net zero ambition. Subsequently new homes require far less energy to power and heat, making them more fuel-efficient and affordable to run.

Whilst the Government has introduced schemes to support improvements, older properties require extensive and costly retrofit works to get anywhere near the efficiency levels of new builds.

The new build industry’s efforts to improve efficiency are evident when considering the numbers. In reviewing government data, we found the average new home uses approximately 100 kWh per m2 per year compared with older properties which require an average of 259kWh per m2. Across all property types and sizes, new build home usage fell significantly below existing dwelling usage.

Measuring energy performance

Back in 2007 it became mandatory for Energy Performance Certificates (EPC) to be produced for all new homes prior to them being sold, grading them from G to A. As well as improving the marketability of new homes, the scheme helped to elevate consumer awareness of home energy efficiency.

While the Government has introduced schemes to improve energy efficiency, older properties fail to reach the same standards as new build homes. For homes recorded in the year to June 2022, 84% of new builds were rated A or B for energy efficiency, while under 4% of older homes reached the same grade.

Cutting energy bills

In addition to these environmental factors, there are huge financial benefits for homeowners. On average, government data shows that new build properties cost ￡1,500.43 to run a year compared to existing dwellings which average at ￡3,570 - that’s a saving of more than ￡2,000 per property each year. These savings rise to ￡2,600 a year when comparing new and old?houses?alone.

Reducing carbon footprint

Thanks to reduced energy usage, technological advances, improved industry knowledge and low carbon heating, new builds emit significantly less carbon dioxide each year. For homes registered with an EPC in the year to June 2022, the average new build emitted 1.4 tonnes of carbon over the year, whilst the average existing dwelling emitted 3.7 tonnes.

When looking at the breakdown of carbon emissions by type of home, new builds emit significantly less across all property types – flats, bungalows, maisonettes and houses. This means that last year’s new build home purchasers are reducing carbon emissions by an average of 2.2 tonnes a year per home, with a total saving of 548,000 tonnes compared to if they had bought an equivalent older property.

If all 1.38 million existing dwellings in this sample were brought up to the same efficiency standards as the new builds, carbon emissions would been reduced by over 3 million tonnes over just 12 months.

Energy efficiency an increasing priority

Consumers are increasingly prioritising the energy efficiency of homes. With 3 in 4 people worried about the energy performance of their current home, homeowners consider a good EPC rating a ‘crucial’ factor when considering their next home purchase.

Despite the considerable differentials in the cost of heating and running new build homes compared with older properties and the increasing percentage of monthly outgoings that energy now represents, most mortgage affordability calculations include a single national average energy bill across all types of home regardless of the property’s efficiency. This approach does little to incentivise buyers to make financially beneficial and eco-conscious decisions, with the consequences being higher ongoing costs or potentially huge bills for retrofit measures applied to older properties.

As the voice of the home building industry in England and Wales, the Home Builders Federation (HBF) is calling on lenders to take the cost-saving benefits of new build properties into account when assessing mortgage applicants, so consumers can benefit further through cheaper mortgages.

To find out more and explore ambitious case studies from the house building industry, read the Watt a Save energy report on the HBF website.