Watt A Save: Maximising the energy efficiency of new homes

This is demonstrated by HBF’s recent report, Watt A Save, which analysed Government Energy Performance Certificate (EPC) data and found that new build homes emit a third of the carbon of an older property, collectively reducing annual carbon emissions by over 500,000 tonnes and save the average new build purchaser more than £2,000 per year on their energy bills. The report also includes several case studies demonstrating developers’ determination to go even further by utilising new technologies and methods to ensure efficiency is embedded to the highest standard from the point of construction. This research and investment in new products and materials will mean that the gap in efficiency and performance between older homes and new builds will only increase in the coming years.

However, the scale of the task at hand should not be underestimated and certainly cannot be achieved by home builders working in silo. To this end, the Future Homes Hub is playing a pivotal role in facilitating the collaboration needed within and beyond the new homes sector to help meet the climate and environmental challenges ahead. The Hub, while “industry-owned”, is an independent body that is bringing together home builders, product and material suppliers, the wider supply chain, energy infrastructure providers and skills bodies to generate commercially practical means of achieving Net Zero and other environmental objectives.

With the introduction of the Future Homes Standard in 2025 and with it, significant changes in the ways new homes are built, collaboration will be key to ensure that the transition occurs as effectively and efficiently as possible. But as we embark on our journey to net zero, it is important that we don’t forget to also bring along the people who will be living with the consequences of these changes, the consumers. And to do so, will require support from industry, lenders, and policymakers.

Positively, evidence suggests that making new homes even more environmentally and energy efficient will be well-received by consumers. Around a quarter (24%) of respondents to a recent HBF survey said energy efficiency will be ‘crucial’ to their next home move. Furthermore, being ‘eco-friendly’ and ‘having a good EPC rating’ were cited as the second and third most desirable features in a new home, behind outdoor space. With uncertainty around future energy costs, we can only surmise that a growing proportion of home movers, both buyers and renters, will prioritise efficiency of property in their decision-making.

While this is encouraging, the electrification of new housing, with a move away from gas central heating to heat pumps and the introduction of Electric Vehicle charging points for all new homes, will mean that new homes both look and run differently to the properties of old. And so, it is important that consumers are empowered with the knowledge necessary to make these new technologies work for their lifestyles. If we lose their support, our efforts to decarbonise will be dealt a critical blow.

The home building industry is shouldering much of this responsibility in this area but there is also a key part for Government to play in complementing and supporting industry efforts to provide consumer education through its own information and advice campaigns. Support from Government, regulators and energy network providers is also needed to ensure that our growing reliance on electricity as opposed to gas can be accommodated by requisite Grid capacity. Some recent examples in West London have shown the Grid to be close to capacity in some parts of the country even before the hoped-for expansion in electric vehicle and electric heating use.

"Customers should be assessed against the actual expected running costs of the property they will be purchasing rather than a national average energy bill"

Another area where Government, and lenders, can make a difference is in relation to mortgage finance. While mortgage providers frequently market “green mortgages”, these often see homebuyers benefit from a one-off cashback payment of a few hundred pounds so although welcome they amount really to a marketing tool rather than a proper green incentive for consumers. Buyers should 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 bills now represent, most mortgage affordability calculations include a single national average energy bill across all types of home regardless of the property’s efficiency.

In a modern market economy, customers should be assessed against the actual expected running costs of the property they will be purchasing rather than a national average energy bill. This would incentivise homebuyers to make eco-conscious decisions and ultimately lead to energy efficiency becoming a more important factor in determining a property’s value.

Achieving net zero is complex and new homes are only one small part of the puzzle. Cracking the puzzle will need collective action and collaboration across sectors. The education and incentivisation of consumers to support these changes will be vital and to be achieved, requires industry, lenders and Government working in partnership.

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