The cost of running a home has become one of the most widely discussed topics in recent months, with Google searches for the term ‘energy bill’ increasing by more than 800% in the last year.
So it’s unsurprising that improving the energy efficiency of our homes and reducing bills has become an increasing priority for homeowners and those looking to buy their first property.
Buying a new home vs upgrading an old one
The UK has one of the oldest and most inefficient housing stocks in the world, with nearly three quarters of our homes built before 1980.
Much of the conversation around ways to reduce energy usage has been dominated by quick wins and fast fixes.
This could be using draught excluders, swapping out baths for showers and switching off electrical appliances rather than leaving them on standby.
While these measures can help cut your energy bills, it takes a lot more to bring older homes up to modern energy efficient standards.
It generally requires retrofit works, which can’t be done overnight.
They can be disruptive, costly and time-consuming, so aren’t a reasonable option for everyone.
Our Get on with living report has found that the average three bedroom semi-detached home would cost £61,500 to upgrade to the current standards new builds are built to.
This figure rises to more than £73,000 when including exterior rendering and guttering.
New-build homes have energy efficiency built in, as they’re designed and delivered according to updated and evolving building regulations.
They also use new technologies and materials, and are built with environmentally-conscious practices to support and encourage natural biodiversity.
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How much can you save on your energy bills with a new-build home?
As a result of this improved efficiency, new-build homes use significantly less energy than their older counterparts.
So new build homeowners see much lower utility bills, on top of the money saved by not forking out for expensive retrofit works.
Our analysis of government data found 85% of new-build homes were awarded an A or B Energy Performance Certificate (EPC) rating last year.
Meanwhile, only 4% of existing dwellings reached the same energy efficiency standard. The most common energy performance certificate rating in the UK is D.
So what does it all mean for your energy bills?
A new-build home will save you an average of £2,600 on energy bills per year.
And our research shows new-build homeowners will save even more when the government’s Energy Price Guarantee increases on 1 April 2023.
From then, we expect new-build owners to save more than £3,100 per year in England and, due to an older housing stock, £3,300 per year in Wales.
Thinking that saving may be due to new builds being smaller than their older counterparts?
Our Watt a Save report explored this theory and found that new builds use significantly less energy per square metre over the course of a year.
We also found the new-build homes are larger, with an average floorspace of 90.7 square metres compared to existing dwellings at 84.4 square metres.
What do lower energy bills mean for getting a mortgage?
When considering you for a mortgage, banks take your monthly income and outgoings into account.
With new-build buyers seeing monthly savings of £260 on energy bills, they’re likely to be in a better position to afford monthly mortgage payments than those buying older homes.
However, mortgage lenders don’t currently factor in the energy performance of a home when looking at affordability calculations. A national average energy bill is used instead.
At the Home Builders Federation, we’re encouraging lenders and the government to make changes that’ll support and encourage more people to buy energy efficient new builds.
But in the meantime, choosing a new-build home could still open up your buying options.
House developers offer incentives, like contributing to your deposit or energy bills, and low-deposit mortgage schemes to increase your borrowing options.
Plus, the Welsh government has confirmed an extension of the Help to Buy scheme for buyers of new homes with a minimum EPC rating of B.
Given the cost-conscious and time-precious time we’re living in, it’s no surprise that many homebuyers are opting for the benefits of buying a new-build home so they can get on with living.
If you’d like more information on new-build homes and the schemes and incentives available, visit New Homes - Home Builders Federation.
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