Alliance
has revealed that over the last 10 years the price of purchasing a new home has
increased by 47%. New-build properties now command a 37.3% house price premium
in the existing market.
The
end-to-end real estate fund analysed UK new-build property values over the last
decade along with how the price of a new home compares to existing market
stock.
New
build property prices
After
adjusting for inflation, the average new-build property has risen by 10.6% in
the last year. That is a 47.1% increase in the last decade.
The
South West is home to the largest annual increase. New build homes in this neck
of the woods are now commanding 14.7% more than they were just a year
ago. The South West experienced the best new-build property performance
over the last 10 years. The average new home in the South West commands 93.6%
more than it did in 2012.
The
research also highlights that the price premium paid on new-build homes has
increased. 10 years ago, the average new build commanded a 21.2% house price
premium versus the average cost of an existing property. This new-build house
price premium currently sits at 37.3%, meaning the gap has widened by 16.1%
between the new-build and existing market.
Over
the last year, the price gap between the new and existing markets has increased
by 11.6%. Overall, these stats show the continued strength of the new-build
sector.
Chief
executive officer of Alliance Fund, Iain Crawford, commented: “The cost of
a new home has increased
substantially in the last year, let
alone the last decade, and those looking to get that first foot
on the ladder are now facing a far tougher task as a result of a
prolonged period of boom throughout the property market.”
“At the same
time, the market premiums that new homes are commanding has also
strengthened and while this demonstrates the superior offering
of the new-build sector versus existing market stock, it does
widen the affordability gap for many homebuyers.”
“Of course,
a new-build home presents many advantages that an existing home does
not, such as a smoother sale and no onward chain to consider, greater energy
efficiency which has never been more important in the current
climate and the additional benefit of incentives offered by many
developers such as the removal of stamp duty
on the purchase.”
“With
many now predicting an end to the pandemic property market boom,
a new-build purchase is probably the safest path when
looking to negate any downturn in property values over the coming
months, as they also hold their value to a far greater extent.”
Property Investor
Today