New homes save buyers £135 a month – HBF

Watt a Save July 2023

The Home Builders Federation is calling upon government to work with lenders to create a “proper market” for green mortgages, as its latest research shows that new build home owners will continue to save an average of £135 a month under Ofgem’s new price cap.

HBF’s updated Watt a Save July 2023 report reveals that further savings are made when comparing new build houses to their older counterparts, with average monthly running costs reportedly £183 cheaper.

The report, based on an analysis of government Energy Performance Certificate (EPC) data for the year to March 2023, finds that 85% of new build properties achieve an A or B EPC – the highest performing levels – while only 4% of older homes attain this.

According to the government’s data, new homes use 55% less energy and 60% less carbon than older properties. HBF said these findings demonstrated the advantages of modern building practices, technology and products, “and industry’s commitment to greener, environmentally conscious construction”.

And new homes, the data shows, help reduce the UK’s carbon emissions by 500,000 tonnes a year.

HBF said that while housebuilders continued to rapidly adjust to net zero targets, the government needed to work with lenders to offer incentives for buyers of energy saving homes, establishing a “proper market for green mortgages” given the mortgage market “squeeze”.

Currently, HBF explained, most mortgage affordability assessments were based on the same assumptions of energy bills, even though EPCs provided an indication of household running costs. Lenders would therefore routinely apply the same assumed monthly expenditure to households, no matter what the home’s level of energy performance.

HBF said: “This is a missed opportunity to offer improved mortgage deals that incentivise environmentally conscious and long-term money-saving buying decisions, which would also support the next generation to realise their home ownership ambitions.”

HBF also warned that with the 2025 Future Homes Standard (FHS) drawing closer, government must also act to ensure a supply chain and skilled workforce to support “ever more technologically-advanced and energy-efficient new homes”.

The report, which also examines the performance of homes being built to the increasingly rigorous standards of the new Part L and the FHS, estimates that new homes built to the updated Part L will produce 71% less carbon than the average older property.

Neil Jefferson, HBF’s md, said: “The action industry is taking to continually improve the energy and carbon efficiency of new homes is contributing significantly towards government’s net zero action plan and helping to ease the mounting pressures on household incomes across the country.

“As mortgage affordability gets tougher, rental costs increase and the country’s need for homes grows increasingly desperate, lenders and government must review affordability assessments in consideration of these numbers to support more people to get onto the housing ladder.

“Meanwhile, if government is serious about delivering the number of homes the country needs and achieving against its environmental commitments, nationwide investment in skills programmes, retraining and apprenticeships is essential.”

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