The UK smart buildings market is forecast to grow by nearly 20% annually through 2026, according to a new report from MarketsandMarkets. That headline, as reported by MarketsandMarkets, reflects a global push toward automation, energy monitoring, and connected devices. But for the average UK homeowner, the question is not whether smart buildings are coming, it is who pays and who benefits.
What the market growth means for your energy bill
The report covers everything from smart lighting and heating controls to building management systems in offices and factories. For a typical 3-bed semi, the direct impact is smaller but still real. A single smart thermostat costs about £150 installed; a full suite of smart plugs, sensors, and a hub can run to £500 or more. The Energy Saving Trust estimates that smart heating controls can save around £75 a year on gas bills, but only if you use them properly. The catch is that many households buy smart devices without changing their behaviour, so the savings never materialise.
Meanwhile, each smart device draws standby power. A smart speaker uses about 3 watts; a smart plug, 1 watt. Multiply that by a dozen devices, and the annual cost is around £25, roughly the same as leaving a LED bulb on for six hours a day. The market growth means more devices, not lower bills, unless the technology is paired with genuine energy reduction.
Who qualifies, and who doesn’t
The biggest winners from the smart buildings boom are commercial landlords and new-build developers. They can install whole-building management systems that reduce energy use by 15–30%, as cited in the MarketsandMarkets report. For private renters, the picture is different. Landlords have no obligation to install smart controls, and tenants cannot easily retrofit them without permission. Ofgem’s data shows that private renters pay on average £240 more per year for electricity than owner-occupiers, partly because they have less control over heating and insulation.
The government’s Smart Meter programme has installed over 30 million meters, but only half are operating in smart mode. The rest are effectively dumb. Until every home has a working smart meter, and the tariffs that reward off-peak use, the market growth will primarily benefit commercial property owners, not households.
What this misses, the efficiency gap
But the smart buildings narrative skips a crucial fact: technology alone does not cut energy use. A smart thermostat in a draughty, poorly insulated home will simply heat the house faster and then lose the heat. The real savings come from fabric efficiency, insulation, double glazing, draught-proofing, which the report does not address. The UK has the oldest housing stock in Europe, with 19 million homes needing some form of upgrade. Smart technology is a tool, not a solution.
The government’s own figures show that homes with an EPC rating of C or above cost £1,000 less per year to heat than those rated D or below. No smart device can bridge that gap. The smart buildings market will grow, but without mandatory minimum standards for existing homes, like the proposed Future Homes Standard, it risks becoming a luxury add-on rather than a universal benefit.
What should a homeowner do? If you are on a standard variable tariff, start with a smart meter, it is free and gives you real-time data. Then invest in insulation before any smart heating controls. The Energy Saving Trust recommends loft insulation first (saves £180 a year), then cavity wall (£195), then smart controls. The market will sell you gadgets; your home needs fabric.
Frequently Asked Questions
No. Smart devices only save energy if you actively adjust your usage. The Energy Saving Trust says smart heating controls can save around £75 a year, but only if you programme them properly. Without behavioural change, they add to standby costs.
Not yet. The Future Homes Standard, expected in 2025, will require new homes to have low-carbon heating and high efficiency, but does not mandate smart controls. The Smart Meter programme is voluntary for existing homes, though suppliers must offer one.
