Price gap between existing properties and new builds widens
The gap in price between existing homes and the premium paid on new builds has grown by £40,000 (11%) in the last decade, according to the latest research from new build inspection company, HouseScan.
10 years ago, the average new build in Britain went for £204,319, 19% more than the average existing property (£171,781).
However, today the average new build is currently valued at £314,242, 30% more than the average existing property (£242,018).
Harry Yates, founder and managing director of HouseScan, said: “I think many homebuyers will appreciate that a brand new home will carry a price premium, in the same way a brand new car will set you back more than a second hand one.
“However, some might argue that to see this margin increase quite considerably in the last 10 years is a bit of a low blow. Especially when you consider the various issues that have plagued housebuilder reputations, from the leasehold scandal, to the recurring issues surrounding substantial snagging lists amongst others.
“However, it’s also reassuring to see that despite an increase, the closing gap between property values in some regions means homebuyers are actually paying a smaller premium now compared to a decade ago, despite consistent upward house price growth.
“Essentially, the best value new build purchase is in the North East as the monetary gap between existing and new build homes is not only one of the smallest, but it’s reduced by the largest margin since 2010.”
In London, new build properties currently sell for 2.3% more on average. While this isn’t a huge premium, a decade ago, new build homes actually sold for -3.2% less than existing homes.
In the South East, the average new build home would set you back £20,840 more than an existing home in 2010. Today, this gap has widened to £41,935, meaning new build homebuyers are paying double the premium they were a decade ago.
The East of England (£15,245), South West (£7,162) and East Midlands (£6,132) have also seen thousands of pounds added to the new build price premium paid by homebuyers since 2010.