New research based on Government Energy Performance Certificate data has found that buyers of a new build house will save on average around £2,600 a year in energy bills.
The report ‘Watt a Save’, published by the Home Builders Federation (HBF), shows that in total, last year’s new build purchasers are saving more than £500m a on annual energy bills, with new build homes emitting a third of the carbon of an older property, reducing carbon emissions by over 500,000 tonnes.
HBF is now urging lenders to further support homebuyers to make energy efficient and money-saving purchases by factoring in energy bill savings into mortgage calculations.
An analysis of Government data on the energy efficiency of new build and existing homes, highlights:
- New build properties significantly reduce households’ energy usage, with the average new home using approximately 100 kWh per m2 per year compared with older properties which require an average of 259kWh per m2.
- New build properties (houses and flats) save an average of just over £2,000 per property each year, with the average annual running costs for a new build totaling £1,500 as compared to an average of £3,570 for older properties. These savings rise to £2,600 a year when looking at new and old houses alone, rather than smaller properties such as flats or bungalows.
- 84% of new build homes were rated with an EPC of B or above, while less than 4% of existing dwellings reached the same standard.
Despite Government action to try and energy prices manageable, bills are now significantly higher than just a few months ago. While there is some comfort in the recent intervention to cap typical energy bills at £2,500, households in poorly insulated and inefficient older properties will continue to pay more than those living in a new build.
Uncertainty remains as to what happens once the recently announced cap on bills is lifted and, as costs rise, so will the savings that new builds can offer. Without the Government intervention, savings for new build buyers would have risen to more than £4,000 a year from next January; and with average bills rocketing to over £10,000 from next April according to some forecasts, the benefits of living in an energy efficient property will continue to grow.
Consumers are increasingly prioritising the energy efficiency of new homes with around a quarter (24%) of respondents to a recent HBF survey stating it will be ‘crucial’ to their next home move. HBF is urging lenders and the Government to do more to ensure that consumers can benefit from the financial and environmental savings that the most energy efficient homes can offer and that the actual running costs of the property being purchased are factored into mortgage affordability calculations. Despite the considerable differentials in the cost of heating new build homes compared with older properties and the increasing percentage of monthly running costs 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. Such an 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.
Stewart Baseley, executive chairman of the HBF said; “The energy crisis is highlighting starkly the efficiency benefits and cost savings provided by new build homes. Energy efficiency is a growing priority for house hunters and the financial savings clearly demonstrate why.
“In the face of the cost-of-living crisis we now need lenders to take these savings into account so that consumers can benefit further through cheaper mortgages.”
On top of these dramatic savings, buyers of new homes are also contributing to the country’s progression towards net zero, with each new build producing just a third of the carbon emitted by older homes, a saving of 2.2 tonnes of CO2 every year by using on average 100 kWh of energy per m2 of house space compared to 259 kWh per m2 for an older property.
Not only are new homes built to the most up to date regulations, builders are also demonstrating their commitment to go further, using new technologies and methods to ensure efficiency is embedded to the highest standard from the point of construction. The report also explores some of the most ambitious and forward-thinking examples of new homes in the industry. In contrast, owners of existing properties will often find themselves facing disruptive, extensive and costly retrofit works to bring their homes to the same standard.
