On average, buyers of new homes save over £2,000 on household bills per property each year, equivalent to £174 a month. For buyers of houses, as opposed to flats the savings are even greater at £216 per month, an annual saving of £2,600.

With energy prices set to rise again the Spring, the savings that new builds can offer consumers will increase even further, rising to an average of £2,510.73 a year, and £3,117.85 for houses.

On top of this, new build properties are significantly more environmentally friendly than older equivalent properties, emitting just 1.4 tonnes of carbon a year, compared to the 3.6 tonnes that existing properties emit.

As home builders work towards the Future Homes Standard, which is due to come into force in 2025, the energy efficiency of new homes will become even greater in the years ahead. Amid an increasingly eco-conscious consumer base, the role of new build properties in meeting this demand will only become even more important.

Methodology

The Department for Levelling Up, Housing and Communities (DLUHC) regularly publishes updated statistics on Energy Performance Certificates (EPCs) in the UK, which breaks down the rating of EPCs allocated to different property types, and the carbon emission, energy use and estimated bills for new build and existing properties.

By using data from British Gas on average gas and electricity use, and average annual bills for homes of different sizes, this report uses an average combined price for gas and electricity per kWh. Applying this price to the energy use figures from DLUHC, the report estimates average bills for different dwelling types, and the average annual savings for new build homeowners.

The data sample is made up of nearly 1.7 million properties, including over 1.4 million existing dwellings and over 250,000 new builds, all of which were registered with an EPC in the year to end of December 2022.

It is important to note that of the base of existing dwellings, these will encompass a broad range of properties by age, with some being a few years old but many being decades or even centuries old.

Context

As energy prices and household utility bills continue to rise exponentially, the importance of having an energy efficiency home has never been greater. England has one of the oldest and least energy efficient housing stocks in Europe, with over 70% of our homes built before 1980.

Since 2007, all homes in the UK have been required to have an EPC before they are sold or let. The system was introduced in the hope that energy labelling will raise awareness of energy efficiency and encourage upgrading to make properties more marketable. In recent years in particular, homes across the UK have been worth more when scored more highly in an EPC.

On numerous occasions, the Government has attempted to introduce schemes to retrofit homes and improve energy efficiency, but older properties fail to reach the same standards as new build homes. While new build homes are constructed using new technologies and materials, and are built to ever evolving regulations, older homes face extensive and costly retrofit works to get to the same standard.

These newer homes need drastically less energy to power and heat, and therefore are significantly cheaper and more environmentally friendly to run. Although older homes can be retrofitted, research finds it will cost owners between £6,000 and £8,000 to bring a home up to an EPC rating of C, so the financial payback from utility bills would take years to realise.

Energy performance certificates

New build homes are consistently rated with much higher EPCs than existing dwellings. For homes logged in the year to December 2022, 85% of new builds were rated A or B for energy efficiency, while under 4% of existing dwellings reached the same standards. In contrast, 51% of existing dwellings were rated D or lower, as compared to less than 4% of new builds. Energy use

While DLUHC’s data attempts to quantify how much the different dwelling types will spend, on average, on household bills (i.e, heating, lighting, and hot water) each year, it put these figures at £453 for new builds and £840 for existing dwellings. With rampant inflation in energy markets and household bills increasing at unprecedented rates, it is clear that these figures are no longer accurate, but a much clearer picture can be painted by looking at the difference in energy use.

The improved energy efficiency of new build homes has a significant impact on their energy use. The average new build property uses approximately 8,618 kWh a year, as compared to older properties which use an annual average of 21,293 kWh. Although some critics of new build homes may claim this is due to new builds being smaller than existing properties, the data shows this clearly is not true. The new build homes in the data set are not only larger, with an average floorspace of 90.7m2 as compared to existing dwellings at 84.4m2, but also use significantly less energy per m2 over the year. The average new build home used approximately 95 kWh per m2 in the year to December 2022, whilst older homes used 252 kWh per m2 in the same period. Bills

Due to decreased energy use, average new build home buyers will see significant savings on their household bills. The average new build property cost £1,422.99 to run in the year ending December 2022, just 40% of the cost of an average older property, which was £3,515.48. This means that buyers of new build properties in the year to December 2022 are collectively saving over £500 million a year in running costs compared to if they had bought an equivalent older property.

With the Government’s Energy Price Guarantee increasing in April 2023 to £3,000, average household bills will increase again, as will the savings that new build homes can offer. Under the new prices, the average new build will cost £1,707.42, saving £2,510.73 as compared to buyers of older properties who will be facing bills of an average of £4,218.15.

Buyers of houses, rather than flats or bungalows, will see the greatest savings, at £3,117.85 a year. Carbon emissions

While the financial benefits are reason enough to buy a new home, the appeal becomes stronger still when the environmental aspects are also taken into account. Due to the decreased energy usage as outlined earlier in this report as well as new technologies, improved industry knowledge and low carbon heating, new builds are constructed to emit significantly less carbon dioxide each year. For homes registered with an EPC in the year to December 2022, the average new build emitted 1.4 tonnes of carbon over the year, whilst the average existing dwelling emitted 3.6 tonnes. The breakdown of carbon emissions by type of home can be seen in the graph below, with new builds emitting significantly less across all property types. Last year’s new build home purchasers are reducing carbon emissions by an average of 2.2 tonnes a year per home, with a total saving of over 570,000 tonnes compared to if they had bought an equivalent older property.

There are 19.58 million homes registered in England with an EPC of D or below. If all of these properties were brought up to the standard of the average new home built in the year to December 2022, carbon emissions could be reduced by up to 44 million tonnes a year.