Energy efficiency sways more UK buyers towards new-builds

Plus, rise of EPC A-rated new homes and spotlight on new homes demand in London
Written By:
Anna Ward, Knight Frank
3 minutes to read

Higher energy efficiency, more input into designing off-plan purchases from the outset, and no seller chain.

These were the three factors highlighted as being the most appealing about new build homes, according to Knight Frank’s latest sentiment survey of over 300 individuals based in the UK.

Overall, a fifth said they were looking for a new-build home, up from 13% for the three consecutive prior years.

Let’s focus on energy efficiency as, of those looking to buy a new build home, the majority (over 60%) said this was the key reason why.



We know more energy efficient homes save bills in winter. Our analysis of Energy Performance Certificate (EPC) data from more than 600,000 new and existing properties transacted over the last three years points to an average 56% saving on annual energy costs (lighting, heating and hot water) when comparing a new-build with an existing property.

Factors that make homes more energy efficient in winter can also help keep the heat out in the summer, something which is likely on the minds of homebuyers now as temperatures soar.

A high EPC on a property can demonstrate it has good insulation and glazing, ensuring it can stay cool in summer and warm in the colder months.

The prospect of future environmental regulations is also having a stronger influence on buyer decisions. In total, a quarter said that this was the main factor driving them to buy a more energy efficient home, up from 20% two years’ ago.



The survey also found an increase in the proportion of respondents who do not want to install energy improvements themselves. This has increased from a fifth two years’ ago to nearly 30% today, pointing to the rising convenience of new homes.

If they do, the most popular choices trend towards the lower cost or easier to install items such as energy efficient LED lightbulbs (half of respondents), double or triple glazing (40%), and loft insulation (just under 40%).



Energy efficiency of new builds accelerates

Energy efficient new build homes are on the rise, with the number of new homes awarded the top EPC A grade hitting a record high in the second quarter.

In total, 3,944 made the top grade in Q1 2024, according to the latest ONS data, up 80% from 2,162 in Q1 2023, and a near-20% improvement on the previous quarter.

The proportion of EPC A-rated new homes out of all new stock also hit a fresh record high of 7% in Q1, up from 5% the previous quarter.

Spotlight on London new homes

Demand for new build homes in London is picking up, with key demand metrics showing an improvement on last year. Reservations should pick up as rate cuts come into view, but housing supply is stretched in the capital as soaring costs are limiting new development, making housing a key battleground in the UK’s imminent general election.

In April, the total number of offers made on new homes in the capital rose 9% compared with a year earlier, while viewings were up 17%, Knight Frank data shows.

For more, read our latest digest on the market.