The rising demand for energy-efficient new builds

25th April 2023

New Build Home on the River

Daniel Wittenberg, head of development management at Fruition Properties, spoke to What House recently about why more people are choosing new build homes.

What do you think are the main reasons why people buy a new build property?

Buying a new home is an exciting and often daunting experience and for most people, represents the biggest financial commitment they will make in their lifetime. Given the rising cost of living and uncertainty in the current economic climate, it’s no wonder people are looking for ways to reduce the stress associated with such a purchase.

New builds offer a range of advantages that can help alleviate those worries. This includes significantly lower maintenance costs during the first few years of ownership, so homeowners aren’t constantly worrying about unexpected repair bills or other costly expenses. Furthermore, the two-year developer warranty and 10-year structural warranty that accompanies the purchase gives homeowners the assurance that their investment is protected and provides peace of mind.

Another advantage worth mentioning is that there is no seller chain to contend with and the uncertainty and delays that inevitably come with that. Modern building practices also mean that new builds are incredibly energy efficient, which is especially attractive to buyers who are keen to both manage their financial outgoings and to live more sustainably.

Can you tell us about energy efficiencies in new build property?

It’s an area that’s historically been overlooked, but the building industry has become a lot more conscious of the benefits over recent years. This has been supported by the implementation of higher environmental standards, such as Code for Sustainable Homes and changes to Building Regulations, all of which help ensure that a new-build property minimises its energy consumption, environmental impact, and associated costs. These aspects are increasingly important to buyers who are conscious of their carbon footprint as well as their personal financial responsibilities.

How is this efficiency achieved?

The roof, internal and external walls, and floor will be insulated to the latest Building Regulations standards, while homes may have double or triple glazed windows and will usually benefit from low energy lighting. They’re equipped with modern and efficient boilers, and many new homes may come with solar photovoltaic panels and/or air-source heat pumps. All these elements go towards a property’s energy performance rating and the ensuing Energy Performance Certificate (EPC) must be provided to the buyer as part of the sales process.

What schemes are you currently marketing?

Now nearing completion, Windows on the River, our riverside development of seven, two- and three-bedroom apartments in Chiswick, have just been issued with their EPCs. As to be expected our new apartments, which benefit from on-site electricity generation through PV panels, 94% efficiency rated boilers and low energy luminaires, are highly efficient and are rated B. You might naturally ask, if it’s a new build why isn’t it rated A and that would be a good question. While it’s always our goal to achieve an A rating, sometimes it’s just not possible due to planning and/or space restrictions, for example a limit to the number of PV panels or heat pumps one can install on the roof. These limits could be a result of available roof space or the local authority restricting the installation of such items.

What impact does a high rating have on bills?

High ratings have a positive impact on consumer bills. Whether rated A or B, such energy efficiency means the cost of heating a new build will be significantly lower compared with a draughty old Georgian or Victorian house. So, although new build properties are known to have a ‘new build premium’ as they are brand new, any additional upfront cost becomes less significant over time as high energy costs, here for the medium-term it seems, can be offset by lower running costs in the future.

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Airspace Developer

Do you think people know what a big benefit this is?

We actually think that there should be more information out there so that customers can clearly understand how they can benefit when buying a new build home.

A recent survey by the Royal Institution of Chartered Surveyors (RICS) found that 61% of estate agents believed energy efficient homes were holding their value against the latest ONS figures, which stated a 0.3% drop in house prices in November. New research by the Home Builders Federation ‘Watt a Save’ showed that buyers of new build properties save, on average, over £2,000 on household bills per year. This is really useful to know when so many of us are experiencing cost of living pressures these days.

How can potential new home buyers find out how environmentally friendly the house is?

The easiest way is from the EPC, which shows the likely annual running energy costs of a property plus how much carbon dioxide (CO2) it will produce i.e., the yearly environmental impact. A member of the Good Homes Alliance, Fruition Properties’ ethos has always been to design homes to be more energy efficient and less expensive to run, as well as using sustainable materials and methods of construction whenever possible. Compared with the household average of 6 tonnes per year of CO2 emissions in England and Wales, our apartments in Chiswick are forecast to produce significantly less, just 0.8 tonnes per year.

How are these higher standards of energy efficiencies affecting the wider property market?

As the drive to be more sustainable and energy efficient picks up pace,  government net zero targets mean all properties in England and Wales have had to meet increasingly higher standards of energy efficiency, thereby impacting landlords too. Therefore, it’s not just savvy homeowners who are attracted to new builds, they are drawing interest from investors in the property market too.

Do you think buy-to-let landlords take EPC ratings into consideration when investing in new build properties?

Yes we do. Since 2020, properties can only be rented if they have an energy rating from A to E and landlords have an obligation to improve the property’s rating if rated F or G. Not surprisingly, investors who own buy-to-let properties, despite the availability of some grants, are potentially facing huge bills to bring old and draughty rental properties up to standard, so to avoid such expense landlords are increasingly buying up new-build homes. A recent study by Hamptons estate agents cites that one in eight new builds were bought by investors in 2022, the highest since 2017. Moreover, by 2025, the government is proposing newly rented properties must have an EPC of C or above whilst existing tenancies must be rated C by 2028.

So what do you think the future of new build properties ‘vs’ older properties looks like?

Many older properties, particularly period and heritage ones, undoubtedly have charm and will continue to attract interest. However, as higher energy costs look likely to remain, combined with the move towards net zero targets, the demand for energy efficient new builds will only continue to grow.

This article first appeared in What House.

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