New-builds are “consistently” more energy efficient than second-hand properties, meaning significant potential savings on bills for those who live in them.
If you live in a new-build property – whether as a tenant or a homeowner – you are likely to save an average of £2,200 per year on your energy bills, which equates to around £135 per month. This is according to new research carried out by the Home Builders Federation (HBF).
Across all new-build occupants, this accounts to more than £400m annually on bills, says the report, with brand-new homes creating 500,000 tonnes less carbon emissions than older properties. This saving is despite bills dipping slightly since their peak during the winter.
With the quality and energy efficiency of the country’s properties expected to improve thanks to the Future Homes Standard set to come into play from 2025, energy bills could be cut by 70% on newly built homes after this point, providing a major investment incentive.
The importance of energy efficiency
As the HBF points out, England has some of the least energy efficient housing stock in Europe, due to the sheer quantity of old houses that exist. These tend to be poorly insulated compared to modern buildings, and often take significant refurbishment to bring up to the same standards as newer properties.
Seven in 10 homes across the country were constructed before 1980, but thanks to the government’s onus on meeting net zero targets, around 85% of all newly built properties in England now achieve the highest energy efficiency ratings of A or B in their energy performance certificate (EPC) ratings.
However, only 4% of existing homes hit these top ratings, and more than 50% of existing properties scored a D or below.
While reducing energy bills is of course a major priority among many households right now, reducing carbon footprints is also important to many. The report puts the energy savings that can be made by investing in a new-build property into perspective:
“In the year to March 2023, the average new build emitted 1.4 tonnes of carbon, just 40% of the 3.6 tonnes emitted by an older property, a saving of 2.2 tonnes per year. This saving rises to 2.8 tonnes per year for houses, the equivalent of a return flights from London to Tokyo.”
Bills across various property types
Of course, the size of the property has an impact on energy bills, as a larger home will generally cost more to heat. A large family home used by many people, as opposed to a small flat occupied by a single person or a couple, will also inevitably use more energy, making it even more important to make savings.
The study looks at the average monthly and annual costs of various sizes of property, to assess the savings that can be made by buying a new-build. Newly built houses see the biggest savings, of an average 64%, or £2,199.65 per year.
Meanwhile, the lowest savings, although still significant, can be found with flats. Average energy bills on a new-build flat amount to £1,180.28 per year, compared with £1,950.74 on an older flat, which is a 39% saving (£770.45).
Investment is essential
Commenting on HBF’s findings, managing director Neil Jefferson said: “The action industry is taking to continually improve the energy and carbon efficiency of new homes is contributing significantly towards government’s net zero action plan and helping to ease the mounting pressures on household incomes across the country.
“As mortgage affordability gets tougher, rental costs increase and the country’s need for homes grows increasingly desperate, lenders and government must review affordability assessments in consideration of these numbers to support more people to get onto the housing ladder.
“Meanwhile, if government is serious about delivering the number of homes the country needs and achieving against its environmental commitments, nationwide investment in skills programmes, retraining and apprenticeships is essential.”