To achieve stringent energy objectives, new dwellings are subject to energy conservation measures including low air permeability and high levels of insulation. Mechanical Ventilation with Heat Recovery (MVHR) can be used to control the balance between energy efficiency and Indoor Air Quality (IAQ) in these buildings. This paper evaluates the effectiveness of the design and operational strategies adopted in a new development comprising two apartment blocks in East London. The findings point to significant gaps in operational energy use compared against design projections, and high concentrations in benzene and formaldehyde three years after construction. It is suggested that a combination of internal source control measures at design stage and building fine-tuning in early stages of post-occupancy is necessary to close the performance gap in energy and IAQ.