Poor building standards add £1,000 to energy bills of new homes, analysis finds

The Guardian

16-05-2025

People living in newly built homes are being hit with energy bills that are nearly £1,000 a year higher than need be because of the poor standards to which they have been constructed.
Occupants of homes built in the past seven years have paid about £5bn more in energy bills than they would have if regulations requiring new homes to be low-carbon had not been scrapped in 2016, according to analysis seen by the Guardian.
Equipping new homes with heat pumps, solar panels and high-grade insulation at the time of construction would have cost between £5,000 and £8,500 for most of the period since 2016. Housebuilders, however, have long claimed building to such standards would be prohibitively expensive.
Instead, most new homes have been built to lower standards of insulation, and with gas boilers instead of heat pumps. About six out of 10 new homes are still being built without solar panels. While the government has recently confirmed new regulations are likely to require renewable energy generation to be incorporated in most new homes, which is likely to mean solar panels in most cases, there are still questions over whether an adequate number of panels will be mandated.
Jess Ralston, energy analyst at the Energy and Climate Intelligence Unit, the thinktank that produced the analysis, said: 'Governments giving in to housebuilder lobbying have left Britain with more poor-quality homes, more dependent on foreign gas, and more exposed to the highly volatile gas markets during the ongoing energy crisis. Unless we lower our gas demand by building better, warmer homes that run on heat pumps then we'll just have to import more from abroad, as the North Sea continues its decades-long decline in output.'
Banning gas boilers for new homes, which is an option the government is still examining, would have further benefits, according to separate research that found it would make the UK the second biggest market in Europe for heat pumps, after France. This could kickstart higher growth in the sector and spur more boiler manufacturers based in the UK to boost their heat pump businesses.
The MCS Foundation, a charity that certifies low-carbon technology, said the UK at present installed the lowest number of heat pumps per household in Europe. But if incoming standards on new homes were to require heat pumps, sales could quadruple from 100,000 a year to about 400,000, generating skilled jobs in manufacturing and installation.
However, Neil Jefferson, the chief executive of the Home Builders Federation, rejected the findings of the ECIU analysis. He said: '[The findings are] based on totally incorrect assumptions about the policy timeline, and the suggested savings are as a result completely wrong. New-build homes have become increasingly more energy efficient and now save owners thousands of pounds in energy bills compared with older homes. Significant progress continues to be made, with implementation timetables reflecting the complex requirements, rate that technologies develop and need to develop supply chains.'
The zero-carbon homes standard was first set out under the last Labour government in 2006, and housebuilders were given a decade to prepare before enforcement that was to be implemented from 2016. But under fierce lobbying from housebuilders, those regulations were scrapped under David Cameron in 2015, and nothing has since been put in place to replace them.
The last government started work on a 'future homes standard', but it was delayed several times. Energy efficiency standards for new homes were made more stringent from June 2022.
Labour is now planning to publish a revised regulation later this year to apply to the 1.5m homes the government has pledged to ensure are built by mid-2029, but campaigners and experts are worried that it will be weakened in response to housebuilder lobbying, and that it may not include heat pumps and battery storage, or rules for an adequate number of solar panels.
The government has also given way on wood-burning stoves, which will now be allowed in new homes, despite findings that even the government-approved 'eco design' stove standard results in high levels of air pollution.
A spokesperson for the Ministry of Housing, Communities and Local Government said: 'The future homes standard will be published later this year, and will provide the country with homes that are future-proofed, with low carbon heating and high levels of energy efficiency. This will reduce reliance on fossil fuels and cut energy bills for consumers.'
The 1.35m homes built to poor standards since 2016 will eventually have to be refurbished to meet low-carbon standards at an estimated cost of about £20,000 per household.
The Conservative party derived about a tenth of its donations from housebuilding and property development companies from 2010 to mid-2023, according to analysis by the Guardian.
An 'uplift' to energy efficiency was made in the building regulations for England and Wales in 2022, requiring higher standards of insulation. The ECIU took this into account in its estimates. Only about 5% of new homes built in the UK last year were fitted with heat pumps, despite these being much cheaper to install during construction than to retrofit. Only about 13% of newly built homes were fitted with solar panels in 2023, and campaigners warn that some homes are being fitted with an inadequate small number of panels.
Work by the Royal Town Planning Institute has also shown that new homes are not being well served by public transport, and that only about half of the 'nature enhancement' measures supposed to be a condition of new developments – such as new trees, bird and bat boxes, hedgehog highways and invertebrate boxes – were implemented for new homes in England.