Data: just 1% of new homes being built to highest efficiency standards

Published:31 October 2019

Commenting on the Government’s latest release of energy performance data for homes in England, Dr Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit (ECIU), said: "Figures showing that just 1% of new homes perform to the highest efficiency standards is not just bad news for the planet, but also for families that are left facing higher energy bills than necessary.

“The additional cost of building these homes so that they perform as well as possible is just a fraction of the profits-per-home posted by the largest housebuilders, who are currently making the UK’s progress towards becoming a carbon neutral nation more difficult than it needs to be.

“Despite emissions falling across the economy as a whole, the amount of carbon produced by British homes has been rising since 2014. The easiest and cheapest way of tackling this is to ensure that new build homes waste as little energy as possible. Instead, by continuing to build and sell leaky homes, housebuilders are locking in higher energy use and energy bills for families for decades to come."

Background:

Figure 1 (page five) shows that just 1% of new dwellings registered during Q3 2019 in England attained the highest energy efficiency rating (EPC A).

Energy Performance Certificates (EPCs) provide an easy-to-understand measure of the efficiency of a home. Rated on a sliding scale from A (most efficient) to G (least efficient), they show how much energy a home uses during operation, and thereby resultant carbon dioxide emissions and fuel costs. All homes that use heating or air conditioning require an EPC by law. The Government releases an update on EPCs lodged on Registers in England and Wales on a quarterly basis. Efficiency of buildings in Scotland is devolved to Holyrood.

Space heating is the largest form of direct energy use in the home, and is largely provided by burning natural gas, a fossil fuel. In a 2019 report on UK Buildings, the Committee on Climate Change (CCC) recommended that all new homes should use no more than 15-20 kilowatt hours (kWh) of energy to keep warm per square meter, per year. The latest release of Government data shows that new build homes use 3-4 times this amount (c. 60 kWh/m2/year).

A policy to ensure that new homes were constructed to minimise energy wastage, Zero Carbon Homes, would have seen all properties built since January 2016 meeting high efficiency targets. This policy was cancelled abruptly in the summer of 2015. A recent ECIU report found that the cancellation of Zero Carbon Homes was increasing energy bills for the occupants of new homes. During a recent parliamentary hearing on energy efficiency, Persimmon, one of the UK’s largest housebuilders, admitted it had lobbied against the policy.

Lord Deben, former Conservative Environment Secretary and current Chairman of the UK’s Committee on Climate Change has previously said that housebuilders are ‘cheating the public’ and that they ‘should be ashamed’ over the energy efficiency of homes they are building.

Homes built to meet Zero Carbon Homes standards would have been carbon neutral for regulated energy use (that used to heat rooms, provide hot water, and for lighting). The latest Government data shows that new houses built in the UK produce 1.66 tonnes of carbon dioxide per year, while flats generate 1.31 tonnes per year from these activities. Emissions from homes will need to be cut to as close to zero as possible if the UK is to meet its goal of net zero emissions by 2050.

The Government has recently released a consultation on the Future Homes Standard, which should ensure that new homes built from 2025 reach ‘world leading’ standards of efficiency. However, the report does not provide extensive detail on new regulations, removes the ability of local councils to set targets that are more ambitious than those on a national level, and will come into effect nine years after Zero Carbon Homes would have. This delay is expected to lead to nearly 1.5 million homes being built in England that are not as efficient as they would have been, assuming constant building rates.

Arguments were made against Zero Carbon Homes on the grounds that extra building costs would either reduce the financial viability of housing projects, or would be passed on to buyers in the form of higher purchase prices. It is possible to argue against these by referring to the profits per home made by housebuilders in recent years, and that the price of property is set by levels of supply and demand, rather than by construction costs.

The CCC estimate that the extra cost of building homes to Zero Carbon Homes Standard would have been £5,200 per home. The following table shows profits per home for the UK’s largest house builders.

Number homes built (FY18/19)

Profit per home

Barratt Homes

17,856

£50,950

Bellway Homes

10,892

£72,548

Redrow

6,443

£63,014

Bovis Homes*

1,647

£43,959

Persimmon Homes*

7,584

£67,154

Taylor Wimpey*

6,432

£63,681

*Results for first half of 2019 only. Data from company accounts:

https://www.barrattdevelopments.co.uk/~/media/Files/B/Barratt-Developments/reports-presentation/2019/barratt-ar19.pdf

https://www.bellwayplc.co.uk/media/1626/preliminary-announcement-final.pdf

https://financialreports.redrowplc.co.uk/media/1428/redrowannualreport2019.pdf

https://www.bovishomesgroup.co.uk/~/media/Files/B/Bovis-Homes-Group/documents/reports-and-presentations/2019/half-year-report-2019.pdf

https://www.persimmonhomes.com/corporate/about-us/our-performance

https://www.taylorwimpey.co.uk/corporate/investor-relations/reporting-centre/2019

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