Buying a new build home can offer a range of benefits. 

Firstly, new homes are often significantly more energy efficient, and therefore most cost-efficient when it comes to energy bills. In the two years to September 2023, 84% of new homes in London achieved an ‘A’ or ‘B’ rating on their energy performance certificate (EPC), compared to just 6% of second hand properties. 

Our analysis has found that purchasing a new build home over a second hand home can save you 55% on annual energy costs (including lighting, heating and hot water). Some mortgage lenders are also offering ‘green mortgages’ which grant better interest rates or cashback to buyers purchasing more energy efficient homes, providing another way to save. 

As energy prices have increased in the last few years, this has become a major driver for buyers looking to save on monthly costs. Our recent survey of Savills new home buyers found that 61% of buyers listed the good EPC rating and savings on energy bills as either their first or second reason for buying a new build home.

But another key driver for buyers purchasing a new build home is the low maintenance and renovation costs - with almost 80% of our survey respondents listing this as their priority for buying a new build.

Inflation rising by 17% over the last two years means construction costs have increased significantly – the cost of concrete is up 14.4% on last year (according to ONS). We’re therefore seeing less demand for homes which need improvement work as buyers need to factor in these increased expenses. As such we’re seeing some buyers favour new build homes which are ready to move into, and often come with a 10 year warranty from the NHBC.  

Looking forward we expect the housing market to start recovering once the bank base rate starts to fall and inflation eases from mid-2024. But the reasons for why people choose to purchase a new build home over a second hand one are likely to remain - particularly for budget conscious first time buyers and those looking to maximize their energy cost savings. 

Find out more in our latest New Homes report, September 2023.