EPC numbers imply housebuilding at three-year high in 2022

The number of energy performance certificates lodged for new build homes – seen as a key lead indicator of housing supply – rose to its highest level in three years in 2022, according to official data.

Government numbers on the official register of EPCs, published today, show that 261,332 domestic certificates were registered last year for new builds, conversions or changes of use – up 3.3% on 2021.

This takes the number to the highest figure since 2019, when 264,302 domestic new build EPCs were lodged, and makes it the second highest figure recorded since EPCs were introduced in 2008.

Since April 2008, housebuilders have been required to produce EPCs prior to completion of homes, making the register of EPCs a useful proxy for housebuilding numbers.

However, the numbers from the EPC register are typically higher than the annual official “net additions” housebuilding statistics, because they include conversions and changes of use, and don’t take account of demolitions.

The data out today also showed that delivery of new homes apparently continued to increase toward the end of the year, despite the downturn in the housing market, with the final quarter seeing a 6.1% increase in EPC registrations as 68,638 certificates were lodged – the strongest quarter of the year.

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The numbers reflect the housing market boom that followed the covid lockdown, with housebuilders last year reporting a very strong housing market in the first half of the year, prior to returning to a more usual level from summer, before spiralling in the wake of the turmoil sparked by the autumn mini budget.

In November, the government said official net additions numbers for the 12 months to March 2022 recorded that housing supply rose by 10% on the previous year, with 233,000 new homes completed. This was still 4% down on the 242,700 net additional homes delivered pre-pandemic in 2019/20.

The increase in housebuilding indicated by the latest EPC numbers comes as forecasters suggest a drop off in supply is likely this year and next.

The Office for Budget Responsibility (OBR) last autumn published forecasts predicting a cumulative 9.2% drop in house prices between the 2022/23 financial year and 2024/25, with private housing completions dropping from 174,450 this year to a low of 134,561 by 2025/26. The OBR said housebuilding completions will not have recovered to their current level by the end of the forecast period in 2027/28.