New-builds: The current scale of savings on energy bills


In light of spiralling energy costs, new-builds offer an opportunity for homebuyers, investors and tenants to make significant savings.

Research by the Home Builders Federation illustrates the scale of savings energy efficient homes can offer. New houses and flats save occupiers an average of £435 each year on energy bills.

Household bills, such as hot water and heat, are significantly reduced in new-build properties. Overall, the running costs of new-builds issued with an EPC in the 12 months to September 2021 came to around £116m.

If these properties had been built to the same standards as the existing properties within the sample, running costs would have been approximately £228m. This means occupants of new-builds are collectively saving an estimated £112m per year.

New-builds tend to have much higher EPC ratings compared to existing dwellings. For the dwellings logged during the 12 months to September 2021, about 84% of new-builds were rated A or B for energy efficiency, while only 3% of existing properties met that standard.

The biggest savings are on heating bills

Heating costs saw the biggest cost difference between new and existing homes. Heating bills for older properties cost £666 on average per year. While for new-builds, these bills were 59% cheaper, costing an average of £271 a year. This is a total savings of £395 annually.

Additionally, existing properties had an average lighting bill of £82 per year and hot water bill of £141. This is compared to new-builds, which boasted an average cost of £70 and £113 respectively.

Overall, the average yearly bill for older properties was £890, which is almost twice as much the annual bill for new-builds (£455).

The important environmental impact

New-builds aren’t just significantly cheaper to run, but these properties are also substantially better for the environment as carbon emissions are significantly lower.

Interestingly, new properties account for 15.4% of EPCs and 16.4% of floorspace. However, new-builds make up only 6.4% of the total annual CO2 emissions. Every year, new properties generate about one-third of the carbon produced by the average older property.

This means new-build owners are saving 576,000 tonnes of carbon emissions compared to if they had bought an equivalent older property, so they are helping reduce the country’s greenhouse gas emissions.

These higher energy standards for new builds are having a positive impact on the UK’s progress towards net zero. New energy efficient homes will be more important than ever moving forward.

The other benefits of buying new-builds

In addition to the energy savings and sustainability aspect, there are a number of other benefits that come with buying new-builds. For starters, there are a growing number of green mortgages on offer, helping borrowers save even more money for purchasing a more energy efficient property.

New-builds are often more appealing for homebuyers, investors and tenants. These properties are built with the latest designs and smart technology. Everything is brand new, and there will usually be less repairs and maintenance needed.

Developers will sometimes offer money-off incentives, providing savings, particularly when a project is in its early stages. This offers an opportunity to secure a property at today’s price.

If property prices go up during the build, you could earn capital appreciation from the get-go. This is particularly appealing as house prices have seen strong increases in recent months.

On top of that, as there has been a rise in property transactions falling through, with off-plan purchases, there is a formal agreement to buy. This means the sale is more likely to go through, reducing the risk of being impacted by a broken chain.

An increasing number of landlords are investing in new-builds over older properties. This will likely continue as new build rental yields are higher with tenants paying a premium for quality and sustainability.

BuyAssociation has a range of property investment opportunities available across the whole of the UK, specialising in off-plan and new-build homes. Get in touch to find out more.

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New-builds: The current scale of savings on energy bills


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