The value case

THE VALUE CASE

New-build homes are much more efficient - and therefore cheaper to run - than old homes

Average annual energy costs for existing vs new build homes

Source: ONS.gov, Age of the property is the biggest single factor in energy efficiency of homes

According to the Home Builders Federation, new homes emit 65% less carbon; 86% have an EPC rating of A or B, compared with less than 5% of older properties. (This chimes with the Government's own data, which shows that homes built since 2012 are about 200 times more likely to have an EPC of C or above.)

Not surprisingly, this translates into much lower bills. The average owner of a new house will spend less than half as much on energy as those in older homes - a saving of nearly £1k p/a.

THE VALUE CASE

For any home, reducing emissions also means reducing energy bills

Average annual energy bills, by EPC rating

Source: Rightmove

Ultimately, lower-carbon homes are attractive to residents for financial reasons, not just environmental reasons.

Whether you're moving to a new home or retrofitting an old one, improving energy-efficiency will result in lower energy bills – and the more significant the upgrade, the more significant the saving.

For example, the average 3-bed semi with an EPC A rating will spend 90% less on its annual average energy bills than a similar-sized house with an EPC F rating – a saving of more than £300/ month.

THE VALUE CASE

Sustainability is becoming more important to potential homeowners

Factors ranked ‘very important’ when purchasing a new property

Source: NatWest, S&P Global Market Intelligence

Sustainability factors are also increasingly important considerations for house buyers (i.e. they help to underpin future resale value).

In this NatWest tracker of housing attitudes, there are now various sustainability-related factors in the top 10 most important considerations for people looking to buy a house.

Even EPC rating is now in the top 10 (ahead of, for example, proximity to schools) - reflecting its correlation with lower energy bills, reduced regulatory risk and greater climate resilience.

Achieving Net Zero – or anywhere close to it – will not be possible without extensive decarbonisation of the residential sector.

The good news is that the rise of renewables and new technologies are making this challenge less daunting. But it will require bold action, substantial investment and a supportive regulatory environment.

Still, there are compelling commercial reasons to make this happen – because by reducing emissions, we are also reducing costs (and risks) for residents.

So for investors, lower-carbon housing is not just about better outcomes for the planet. It’s also about creating more attractive, more valuable assets.