The future of energy efficient homes

Our homes are the second-highest producers of carbon every year in the UK. New-build developers want to change that. Here’s how.

From avoiding single-use plastic to upgrading to an all-electric car, as a nation we’re becoming increasing environmentally conscious – even when considering a house move.

Research continually shows that buyers are prioritising the energy performance of new homes, but what about carbon emissions?

All buildings in the UK are the second highest carbon emissions contributor, with residential properties making up a large proportion of this.

However, the country’s home builders are taking action to produce increasingly ‘green’ homes, powered by less energy to help reduce the UK’s carbon emissions and save household running costs.

Our Watt a Save July 2023 report finds the average new-build property consumes 55% less energy, cutting energy bills by £135 a month and reducing carbon emissions by an impressive 60%.

This is despite new-build homes being larger than older properties.

With 247,000 new-build homes issued with an EPC in the year to 31 March 2023, we can see that last year’s new-build homeowners helped to reduce emissions by a collective 500,000 tonnes, compared to if they had been built to the same standards as the average older property.

Why are new builds better for the environment?

New-builds have long offered a cheaper and more environmentally option for the running of a home.

Improved energy efficiency is embedded from the point of design through to construction, thanks to the use of modern building practices, technologies and materials.

Energy usage and carbon emissions: new-builds vs traditional homes

Additionally, more rigorous building standards exist now than ever before.

Last year, changes to building regulations were introduced to set standards specifically related to the energy performance of buildings.

Our research has found that homes now built to these standards will emit 71% less carbon than the average older property.

And the energy savings and carbon reductions won’t stop there.

In 2025, the Future Homes Standard is due to come into force which will require new homes to reduce carbon emissions by a further 75% to 80% on current building regulations.

This will partly be achieved by moving away from the use of conventional gas boilers to modern heating systems, like heat pumps.

In other words, homes built from 2023 will emit 29% of the amount of carbon of the average existing property, and homes built from 2025 will emit just 10%.

If we assume that housing delivery levels in 2025 are around the same as current levels, under the Future Homes Standard, the changes to new homes will see carbon emissions reduced by a further 270,000 tonnes per year.

What does this mean for home buyers?

In recent years, a high EPC rating has crept up the lists of priorities for prospective buyers – particularly those purchasing their first home.

Amid the cost-of-living pressures and with energy bills still stubbornly high, potential customers are also driven by the running costs of a home.

Research we published earlier this year found that 53% of respondents agree that lower utility bills and running costs would encourage them to buy a new home.

The reduction in carbon emissions that new build homes offer come from consistent improvements to the energy efficiency of homes.

In the year to March 2023, 85% of new-build homes were rated A or B for energy performance, while just 4% of existing properties reached the same standards.

Unsurprisingly, this improved energy performance translates to significantly lower utility bills.

In the year to March 2023, the average older property saw monthly energy bills of around £245, while the average new-build energy costs were £110 – a 55% saving.

And as we move towards greener homes, these savings will only become greater. Under the Future Homes Standard mentioned above, a new-build property will use 12% of the amount of energy compared to an older home.

Despite future new homes being 100% electric – which is a more expensive source of energy than gas – it’s anticipated a new-build property built after 2025 will cost a little less than £900-a-year to power.

This is just 30% of the cost of the average existing property which, using a mix of electricity and gas, will cost £2,945 a year.

What next?

As you might know if you are in the process of applying for a mortgage, the affordability criteria are somewhat inflexible.

So, despite the enormous potential savings of high performing energy and thermal-efficient homes, affordability assessments are based on the same assumptions about monthly utility costs. That needs to change.

We’re trying to encourage lenders to develop mortgage products that offer tangible, financial incentives for home buyers to make environmentally conscious, energy-saving choices. Which will in turn support more people to get on that property ladder and become homeowners.

In the meantime, this year’s new homeowners can enjoy lower energy usage, reduced carbon emissions, cheaper energy bills and less eco-guilt so they can get on with living. Sounds ideal to me.

Key takeaways

• New homes built from 2023 will emit 29% of the amount of carbon of the average existing property
• Homes built from 2025 will emit just 10%
• From 2025, the energy bills for a new-build home are projected to be under £900-a-year, compared to £2,945-a-year for an older home