Despite stretched affordability in most parts of the country, with the average income required for a first-time buyer (FTB) to purchase a home reaching £54,000 last year, there are still some pockets of the market where purchasing a new-build home is achievable.
Research by Stone Real Estate looked at the current average cost of buying new across Britain and compared this to the average house price paid by first-time buyers.
It found that the average cost of buying a new build is £101,085 more than the price paid by the average first-time buyer. However, there are a total of three areas where the cost of a new build comes in lower than the average FTB house price.
Despite the high house prices across the general market, Oxford is home to an average new build price of £344,799 – £15,761 cheaper than the price paid by the average first-time buyer (£360,559).
Surprisingly, while the average new build in the capital is £73,043 more expensive than the price paid by London’s first-time buyers, Islington is the second-best area to buy new as an FTB. The average new build here currently costs £586,328, while the average FTB pays out £699,414 – a £13,086 difference.
Elsewhere, the cost of a new build in Ceredigion, Wales, is only £1,238 more affordable than the price paid by the average first-time buyer.
Although new build prices are higher than that paid by the average FTB in other areas, Surrey Heath, Brighton, West Dorset, Hyndburn, Reading, Canterbury and Kensington and Chelsea are home to some of the smallest gaps in price.
Within the capital, Hounslow, Haringey, Richmond, Tower Hamlets and Harrow are also home to some of the smallest gaps between the cost of buying for the first time and the cost of buying brand new.
This may have contributed to the first-time buyer numbers hitting a 12-year high of an estimated 353,436 in 2019.
Michael Stone, founder and chief executive officer of Stone Real Estate, comments: “New builds often carry a price premium and for a good reason.”
“There are many benefits to buying new, whether it be the inclusion of social outlets and amenities to new build developments, financial incentives such as stamp duty paid for, the money-saving aspect of a brand new property in terms of appliances and energy efficiency and the lack of maintenance required when moving in.”
He says as a result, new builds can be way out of the financial reach of first-time buyers and, in some pockets of the market, the gap in price between buying new and buying for the first time is huge.
“However, this isn’t the case across the board, and while some areas aren’t necessarily ‘affordable’, there is an almost level playing field between the price being paid by first-time buyers and the price of a new build property,” Stone continues.
“This is, of course, due to first-time buyers paying much more for their first home in current market conditions. However, we’ve also seen a change in the new build sector whereby housebuilders are putting more of an emphasis on the delivery of affordable homes, with schemes like Help to Buy also helping many onto the property ladder via the new build sector.”