With rising fuel costs causing the average UK energy bill to rise by £693, we look at why buying a new build property could be your best defence when it comes to keeping your energy costs at an affordable level in 2022.
At a time when homeowners in Britain are already feeling the freeze, the news that energy prices will increase by over 50% come April, as regulator Ofgem lifts the price cap, was met with an icy reception by homeowners already struggling with a cost of living crisis.
It’s yet another bitter pill for tax payers to swallow, as fuel prices continue to remain high, the bank of England increases interest rates, and National Insurance is set to rise by 1.25%, right at the point the new energy tariffs come into effect.
On top of this, we’re also being warned that supermarket food prices could rise by up to 5% by spring, only adding to the gloomy financial picture that’s emerging.
So, given the energy price rise is unavoidable, is there anything we can do to offset the increased costs and keep our household bills competitive, without sacrificing our wellbeing?
As easy as EPC
One of the ways you can seek to save money on your energy bills is by purchasing or renting a home with a high energy efficiency rating.
How energy efficient a home is, is determined by a scaled rating known as an EPC or Energy Performance Certificate. These are issued to all properties, rented and sold in England, and they’re valid for a period of 10 years.
To determine your property’s energy performance, an independent assessor will come and inspect things like your home’s heating. They’ll also take into account the year your property was constructed, which can have a bearing on its insulation.
An EPC will show two values for your property: its current energy performance, and its potential energy performance (how efficient it might be in future if you make recommended changes).
Currently, the majority of properties in England rank as D for energy efficiency on a scale of A-G, where A is the most energy efficient. However, new build homes have much higher energy efficiency ratings (84% scoring an A or B according to EPC data recorded in England between July and September 2021).
If you’re not sure of your home’s EPC rating you can find it out for free by entering your postcode on the government’s website.
Why are new build properties more energy efficient?
The simple answer is that building regulations in England have become much stricter than they once were, and this now means that developers must make their buildings at least an EPC C.
This is because our homes are one of the worst polluters when it comes to carbon emissions, and as the government moves towards its target of making Britain carbon neutral by 2050, developers are under pressure to ensure their homes meet increasing energy efficiency standards.
As well as ensuring homes are better insulated, home builders are now encouraged to take advantage of greener heating methods as well as new technology to ensure each home they bring to market has as low a carbon footprint as possible.
This is great news for prospective buyers, or even those looking to rent in a new build property, who will see the energy efficiency savings reflected in their gas and electricity bills. In fact, some findings suggest that new builds can be up to 50% cheaper to run than properties built before 2010, even if their footprint is like for like.
Not only is this better for our planet, it’s also much kinder on our pockets too.
New builds also qualify you for a Green Mortgage
As well as enabling you to keep your energy costs lower, new build properties with an A or B EPC rating can also enable you to earn money back on your mortgage, or even secure a lower rate of interest.
These types of mortgages typically pay out a cash lump sum upon completion providing your property meets an A or B EPC rating (exact criteria and rewards differ per lender).
Some Green Mortgages will also extend to older style homes where energy efficiency improvements have brought the property up to B or A efficiency. So if you’re already rated a B and you’re considering remortgaging, you’ll also be able to take advantage of a Green Mortgage product.
Similarly, if your property is currently a C but has the potential to be a B, making the energy efficiency improvements suggested by your EPC assessor could be beneficial when it comes to remortgaging or selling your property on in future.
As research published by Halifax in 2021 found, homes with higher energy efficiency are more attractive to buyers across all regions of Britain, with the greenest homes able to achieve up to £40,000 more in value.
Looking to purchase a new build home?
At Threshold, new build mortgages are our specialty and our award-winning team of mortgage advisors work with a number of new build developers to qualify their buyers.
If a new build home is for you drop us a note with your requirements using our online contact form.
Your home may be repossessed if you do not keep up repayments on your mortgage.