In his November statement, chancellor Jeremy Hunt renewed the UK’s government’s focus on energy efficiency in the wake of soaring energy prices, triggered by the war in Ukraine and continued international pressure to meet green targets following COP 27.
Hunt announced that he wanted Britain to reduce its energy usage by 15% by 2030, pledging an additional £6bn pounds to support this goal.
Research from the Institution for Government think tank revealed that homes in Britain are some of the worst in Europe when it comes to energy efficiency, and so building new, more efficient homes will form a major part of any plan to achieve the required 15% reduction.
With policy interventions over the last decade having proved relatively unsuccessful, including the 2020 Green Homes Grant which was scrapped a mere six months after launch, we now look to the Future Homes Standard (FHS) 2025 to kickstart a new generation of greener homes.
The first consultation on the FHS in October 2019 aimed to address the significant emissions generated from heating and powering the UK’s housing stock. The FHS includes changes to Part L and Part F of the Building Regulations for new dwellings, which deal with conservation of fuel, power and ventilation respectively.
By enforcing the changes to these regulations from 2025, the government aims to ensure that new homes will produce 75% to 80% fewer carbon emissions than homes delivered under current regulations. In fact, under the FHS, it is anticipated that no new homes will connect to the gas network from 2025, instead being equipped with energy-efficient insulations and heated by a low-carbon heating source.
The impact of this reduction in emissions, if it can be achieved, will be vast and speaks to the growing value of new builds to the UK housing market. As well as going a long way to meet the emissions reduction required by the government, it will also benefit the many UK households dealing with the cost-of-living crisis.
“We now look to the Future Homes Standard (FHS) 2025 to kickstart a new generation of greener homes.”
A recent report by the Home Builders Federation found that new build homebuyers are already saving over £2,000 on household bills per property each year, even before the implementation of the FHS. In fact, for homes logged in the year to June 2022, 84% of new builds were rated A or B for energy efficiency – a number which will only increase following the implementation of the new standard.
In contrast, existing housing stock often doesn’t support the government’s green targets and homeowners may have to consider upgrading their properties as a result, with financial and practical downsides.
The financial incentive alone is enough to mean that homes built under the new regulations will be attractive to consumers. It will also have a positive impact on consumers’ buying power.
Consumer interest in environmental factors in themselves is also increasing, according to research from Bloomberg Intelligence, which found that the energy efficiency of a home was deemed either important or very important by 88% of the prospective buyers polled.
Beyond these standards, property developers are exploring an increasing variety of ways to reduce their overall carbon footprint. The FHS will have significant benefits that build on the great work already being done in the new-build sector, including supporting the government’s green agenda, increasing the attractiveness of new-build properties to consumers, and saving consumers money.
Craig Hall is director at LSL New Homes Financial Services
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