No matter the current government appetite for new housing, what is clear from both a political and social perspective is that the UK needs to keep building new homes to meet demand.
CBRE’s ‘The cost-effectiveness of new homes’ report looked at Energy Performance Certificates (EPCs), and when compared with existing homes, new homes offer two main benefits: they are more energy efficient, meaning they cost significantly less to run; and they are future-proofed against upcoming government legislation on the roadmap to net zero.
Almost all (95%) new homes have an EPC rating of ‘A’ to ‘C’, compared with just 46% of existing homes. Energy bill increases directly correlate to these EPC gradings and those with ‘A’ to ‘B’ ratings average £480 per year up to 2024. In contrast, those with an ‘E’ rating will be up to £1,401 a year and those with a ‘G’ rating will be up to £2,771 a year.
As the residential sector plays its role in helping the country achieve net zero, consumers are becoming more conscious of their homes’ green credentials.
It is worth noting that from 2025, new tenancies in the private rented sector are likely to require a minimum EPC rating of ‘C’, with the majority of new builds satisfactorily meeting this requirement, and the government’s target is for all homes to have this as a minimum rating from 2035.
In addition, the Department for Levelling Up, Housing and Communities has asked the Future Homes Hub to bring together the industry’s knowledge and experience to help inform the government’s planned consultation in spring 2023 on the 2025 Future Homes Standard. The standard will mandate new homes to be zero carbon ready from 2025.
So, how will this ambition be achievable when our housebuilders are faced with every increasing cost pressure alongside a desire to increase efficiency and effectiveness and deliver a more sustainable, quality product using modern methods of construction? Not easy when demands are increasing, too. For example partnerships are becoming more complex and are demanding increasingly complex social value outcomes. In addition, there are the costs of the Building Safety Pledge, and then the general increases in construction costs due to material and labour inflation.
New homes are likely to remain on the agenda and their sustainability credentials will increasingly matter, meaning we will have to work harder on the best way to deliver them.
Amanda Clack is an executive director and head of public sector and strategic advisory at CBRE
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