Alliance Fund 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.”
