The average premium of a new build home in the UK over an existing property is almost a third, but in some locations the premiums is as high at 108%, new research has found.
The current average price of a new build is £290,176, compared with £224,729 for an existing home, a mark-up of 29%, according to a study from Springbok Properties.
The highest premium on a regional basis is in Scotland with new builds costing 41% more than existing homes, dropping to 36% in Wales, 27% in England and 25% in Northern Ireland.
But in certain locations the premium is much higher. For example, in Harlow in Essex the average new build costs £551,089, more than double the average price of £265,249, resulting in a premium of 108%.
Blaenau Gwent is the next worst area, with a 96% mark-up between the new build price of £182,313 and the price of existing property at £92,814, followed by Gravesham in Kent with a 95% and Preston in Lancashire also over 90%.
Rochford and Torfaen in Wales both have a premium of 88%, followed by Middlesbrough at 85%, West Dunbartonshire in Scotland at 85%, Caerphilly at 81% and Merthyr Tydfil at 80%.
In London, there is barely any new home premium, averaging just 3%, although Newnham has a gap of 38%, Redbridge 35% and Dagenham 33%.
‘As the figures demonstrate, in some areas new build properties are going for a hefty market premium and this isn’t confined to one or two locations,’ said Shepherd Ncube, chief executive officer of Springbok Properties.
He pointed out that there are concerns in the industry about the standard of some new builds. For example, research from the HomeOwners Alliance found that 40% of new build owners were unhappy with the quality of their property with snagging lists often finding as many as 100 issues with a new property.
‘While there are many new builds that will be delivered to the standard expected, the thought of forking out way above the odds for a property that falls way below standard is a nightmare scenario for buyers,’ said Ncube.
‘You have to question the consistent failures of many property developers when delivering these homes to the standard promised while still charging such a high price compared to the rest of the market,’ he added.
