Why is energy efficiency such a big deal for London homebuyers in 2025?

Energy costs in the UK have risen sharply in recent years, and a national drive towards net‑zero emissions by 2050 means the buildings we buy today must stand the test of time.

International buyers from the GCC and wider Middle East looking at off‑plan property in London care about running costs as much as location. Efficient homes can cut annual bills by thousands of pounds, reduce carbon footprints and preserve long‑term value, making energy performance a critical factor in any property search.

London’s housing market sits at the crossroads of sustainability and investment. With the Bank of England reducing its base rate to 4.25 % in May 2025 and new stamp duty rules taking effect in April 2025, buyers are seeking opportunities that balance affordability with future‑proof credentials.

Whether you’re relocating your family or building a rental portfolio, a conversation with the Entralon team can help you navigate off‑plan options and energy‑efficient investments.

How do new build apartments and Victorian houses compare for investors?

For investors and landlords, the numbers tell a clear story. New‑build flats in regeneration zones are forecast to deliver 4–5 % capital growth by 2027, compared with 2–3 % for Victorian houses outside prime markets. Rental yields are higher for new builds (4.5–6 %) versus Victorian houses (3–4 %), and void periods are shorter.

Liquidity is also better; new builds typically sell within 6–8 weeks, often chain‑free, while Victorian homes can take 12–16 weeks as surveys uncover issues.

Both asset types face risks. Oversupply and developer bankruptcy can affect new‑build prices, while Victorian houses risk obsolescence if owners fail to retrofit to EPC C by 2030. Economic conditions such as slower 0.9 % GDP growth and trade uncertainties may dampen demand across the board. However, the Bank of England’s interest‑rate cuts signal a buyer‑friendly environment, and many international investors view UK property, especially energy‑efficient new builds, as a safe haven.

What makes Victorian houses appealing?

Despite their inefficiencies, Victorian houses carry enduring charm. Period features like bay windows, decorative brickwork and high ceilings appeal to around 30% of London buyers, according to surveys. Many are freehold, avoiding service charges and giving owners more control over alterations.

Outside London, Victorian homes can be 50% cheaper than new builds, with typical prices between £250,000 and £300,000. Renovation upside is another draw; tasteful retrofits can boost value by 10–15%, and restored properties tend to sell quickly in established neighbourhoods.

Finally, these homes are often located in long‑standing communities with mature trees, schools and transport links. For some buyers, the sense of place outweighs the cost of heating.

What disadvantages do Victorian houses carry?

Energy inefficiency is the primary drawback. A typical Victorian house with an EPC of D or E loses around 60 % of its heat through walls and windows, pushing annual bills over £2,200. Upgrading to EPC C can cost £15,000–£35,000, and listed status can restrict improvements.

Maintenance costs are higher, too. Roof repairs (£10,000–£20,000), damp treatment (£5,000–£10,000) and structural fixes are common. About 40 % of Victorian houses need £15,000 or more in remedial work.

Rental yields also lag behind new builds, averaging 3–4 % with longer void periods (4–6 weeks) because tenants increasingly prioritise efficient living. Upcoming regulations may force landlords to upgrade or sell before 2030, adding further uncertainty.

What challenges do Victorian houses face with energy efficiency?

Victorian houses (built between 1837 and 1901) make up a significant slice of London’s characterful streets, but their heritage comes with inefficiencies. Only 15 % of Victorian homes reach EPC band C or better, while roughly 60 % sit in bands D or E, reflecting single‑glazed sash windows, uninsulated solid walls and aging gas boilers.

The average annual energy bill for a period property can exceed £2,200, more than twice the cost of a new‑build flat.

Retrofitting a Victorian house is possible but expensive. The Energy Saving Trust estimates that bringing a typical period home up to EPC C requires £15,000–£35,000 in upgrades, including wall insulation (£8,000–£12,000), double glazing (£5,000–£10,000) and a heat‑pump or modern boiler (£2,500–£5,000).

Proposed rules for landlords cap the cost of meeting EPC C at £15,000 per property, but many owner‑occupiers spend more to preserve architectural details. Only around 10 % of Victorian homes have been retrofitted since 2020, leaving the majority inefficient. With an average price of £650,000–£800,000 in London and £250,000–£300,000 outside the capital, high running and upgrade costs can erode affordability.

Amir, an Iranian investor pursuing an Innovator Founder Visa, bought a Victorian house in Manchester for £280,000. He fell in love with the high ceilings and fireplace but budgeted £20,000 for efficiency improvements. “The character and freehold status drew me in,” he says, “but I’m using PropTech to manage the retrofit before letting the property.”

Why do new builds excel in energy efficiency?

Simply put, new builds are engineered for sustainability. Their A/B EPC ratings, high‑tech insulation and renewable systems slash running costs by £700–£1,400 per year, require minimal maintenance and comply with future regulations.

These factors make them especially attractive to GCC buyers seeking low‑risk, high‑yield assets in London.

As Amir’s story shows, even investors who appreciate heritage charm often choose a new‑build apartment for their portfolio, pairing it with PropTech ventures or visa applications.

For homeowners like Sarah, the daily comfort and lower bills deliver immediate benefits. In a world moving rapidly towards net‑zero, energy‑efficient apartments stand out as the smart choice.

How energy efficient are new build apartments?

New build apartments are designed for modern living. Roughly 85% of new properties in England received an EPC rating of A or B in early 2024, and the Home Builders Federation reports that owners of new‑build houses save around £2,200 per year on energy bills compared with typical older homes.

High‑performance insulation, double or triple glazing and airtight construction limit heat loss, while low‑carbon heating systems such as heat pumps are increasingly standard. About 20% of new developments now include solar panels and smart thermostats, so residents can monitor and adjust their consumption remotely.

For London buyers, these efficiency gains translate to real savings. With the Ofgem energy price cap putting a typical household bill at around £1,720 a year from July 2025, a well‑built flat can cut the annual cost to roughly £850, or half that figure.

Over five to seven years, these savings can offset the 10–15% price premium on new‑build apartments.

Sarah, a 32‑year‑old teacher, moved from a draughty rental to a modern flat and saw her monthly utilities drop from £200 to about £65. “I own a home with half the costs,” she says. Smart heating controls and floor‑to‑ceiling windows gave her a comfortable lifestyle without high bills.

Beyond running costs, new‑build apartments come with NHBC or equivalent 10‑year warranties, meaning maintenance expenses are minimal, about £500 a year. Developers must comply with Part L of the UK Building Regulations and the upcoming Future Homes Standard, which requires low‑carbon heating from 2025.

For GCC investors looking for off‑plan property, high EPC ratings improve rental appeal; roughly 70 % of UK renters now prioritise A/B‑rated homes. This demand translates into strong yields, 4.5 % in London and up to 6 % regionally, according to CBRE.

Are there any drawbacks to new build apartments?

The biggest barrier is pricing. New builds typically cost 10–15 % more than comparable secondary flats, with average values around £590,000 in London.

Buyers also face leasehold structures. Although the Leasehold Reform Act has capped ground rents at peppercorn levels, service charges for communal areas can range from £1,500 to £5,000 per year.

Another consideration is supply risk. London delivered about 33,000–35,000 new units in 2024 against a target of 52,000+, yet some areas still risk oversupply. In pockets of Zone 2 and Zone 3, multiple towers launching simultaneously could soften prices in the short term.

Lastly, modern buildings sometimes lack the uniqueness of period homes. Buyers seeking ornate cornices and fireplaces may find contemporary designs uninspiring. For those individuals, a heritage renovation may still be rewarding, but energy costs and regulations should be factored into the decision.

What are the advantages of buying a new build apartment?

Modern flats offer a suite of benefits beyond aesthetics. Firstly, top‑tier efficiency saves money: owners typically pocket £700–£1,400 more per year in reduced energy bills compared with period houses. Heat pumps and other low‑carbon systems reduce reliance on gas, supporting the UK’s net‑zero goals and shielding residents from future fossil‑fuel restrictions.

Secondly, maintenance is minimal. New construction techniques and warranties keep repair costs to about £500 per year, while Victorian houses often require £2,000–£5,000 annually for roofing, damp treatment or structural works.

Thirdly, market appeal is high. Eco‑conscious tenants pay premiums for efficient homes, which drives rental yields of 4.5–6 % and keeps void periods short (around 2–3 weeks). For those buying off‑plan, developers sometimes offer incentives, such as paying legal fees or covering stamp duty up to £6,205 on a typical £425,000 flat, to help offset the April 2025 stamp duty changes.

Finally, policy alignment matters. The government’s proposed Minimum Energy Efficiency Standards will require all homes to reach EPC C by 2030, and new builds already comply.

International buyers from the GCC and Middle East can therefore buy with confidence, knowing that their investment meets future regulations. If you’re considering a purchase in London, explore Entralon’s curated new‑build listings for transparent, commission‑free guidance.

Final Thoughts

As energy prices fluctuate and environmental regulations tighten, the gulf between new‑build apartments and Victorian houses has never been clearer.

Modern flats deliver substantial savings, minimal maintenance and strong investment returns, making them a compelling choice for GCC and Middle Eastern buyers looking for off‑plan property in London. Period houses still offer charm and freehold security, but their inefficiency and upkeep costs require careful budgeting.

Entralon’s commission‑free model, transparent advice and daily‑updated listings empower international buyers to make informed decisions. Whether you’re comparing London’s latest green developments or exploring Dubai’s off‑plan market, Entralon will connect you with the right property and guide you through financing, legal requirements and post‑purchase management.

Reach out today to start your energy‑efficient property journey.

FAQs

How do energy ratings affect property value in London?
Homes with higher EPC ratings tend to sell faster and achieve better prices because buyers know they will save on bills and meet future regulations. New‑build flats rated A/B command a premium, while poorly rated Victorian houses may struggle without costly upgrades.

What government incentives are available for energy‑efficient new builds?
Developers often provide incentives such as contributions towards stamp duty or legal fees, and some local authorities offer grants for low‑carbon heating systems. These perks help offset the higher purchase price of efficient homes.

Can I retrofit a Victorian house to improve its EPC rating?
Yes, but it can be expensive. Upgrades like solid‑wall insulation, double glazing and heat pumps can cost £15k–£35k. Listed buildings may require specialist consent, so always consult a conservation specialist before starting work.

Are new build apartments good investments for GCC buyers?
Generally yes. Energy‑efficient flats offer strong rental yields, quick resale times and compliance with upcoming regulations, making them attractive to overseas investors seeking steady returns and visa‑friendly assets.

How does Entralon help international buyers navigate the London property market?
Entralon offers transparent, commission‑free guidance, daily‑updated listings and expert support tailored to GCC and Middle Eastern clients. Their multilingual team handles everything from property selection and financing to legal advice and after‑sales service, ensuring a smooth investment journey.