Green Home Movement gains valuable momentum as energy costs soar.
The future cost of home energy looks uncertain, and both government and UK property developers know it. They have for some time.
The result? Conscientious improvements in the building industry’s energy standards and fundamental changes to building regulations – all designed to offer homeowners cost savings, protect the environment from damaging emissions and unwanted waste, as well as incrementally contribute – home-by-home – to the UK government’s goal to be net zero by 2050.
This elevation in energy efficiency standards, coupled with certified management of sustainable and cost-efficient building practices, makes for great news for buyers that see an efficient new-build as both a convenient and cost effective choice. Recent polls found that up to 52% savings* can be achieved on fuel bills if homes are well insulated using updated boiler systems.
*Against an older / similar sized property
Household energy bills increased by 54% in April 2022, a record increase, and are likely to rise substantially again in October. To put that in perspective, the monthly increases in both gas and electricity prices were by far the largest ever, going back to 1988. The annual increases to April 2022 were also the largest ever recorded on a series going back to 1970.
(ref: UK Government – July 22 Click Here)
High EPC ratings top of the wishlist for new-build buyers
“Now is both a time of great challenge and great change,” explains George Davey, Managing Director New Homes, Land & Development from Stirling Ackroyd. “The serious negative economic impact of the cost of gas and electricity on regular householders is acting as a powerful catalyst, and it’s making people think seriously about energy efficiency and the related eco-upsides of new-build or responsibly converted secondary market properties against less efficient options. All of this means that a property’s energy rating really matters. The attractiveness of new build homes is growing rapidly – which is a very positive thing.”
“Developers of new build homes are at an advantage, as insulation and other measures come together as a holistic project,” George continues. “The broader challenge is that ~18,952,500 secondary market properties still need a low carbon and low energy make-over if the country has any hope of meeting that net zero goal. The cost of making older homes energy efficient is already beginning to become a deal negotiation point. More than 80% of new-builds have an energy efficiency rating of A or B, compared to just 3% of older homes. That says it all.”
Summarising what they see to be next for the Green Home Movement, George concludes, “Decarbonising the housing market and reducing emissions from UK homes is gaining momentum, but it is still in the early stages, and The Future Homes and Buildings Standard clearly states that new homes built from 2025 must reduce carbon emissions by 75-80% versus the status quo – a situation that will deliver game-changing energy savings for new build homeowners. New homes and privately rented properties are where the government’s focus to improve eco-credentials lies right now, but broader support for older home improvements should be a fast-follow, especially given the cost of living crisis”
The Bottom Line – Why do energy efficient homes really matter?
The monthly increases in gas and electricity prices (on this measure) in April were 67% and 41% respectively. These were by far the largest increases on this series which goes back to 1988. The price cap means that changes in prices are ‘stored up’ rather than incremental. The annual increases in gas and electricity prices to April 2022 were 95% and 54% respectively. These were the largest annual increases in data going back to 1970. The previous record annual increases were 52% for gas prices between Q4 2007 and Q4 2008 and also 52% for electricity between Q2 1974 and Q2 1975.
(UK Government – July 2022)
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