New-build price growth outperforms existing homes by 20%

New-build price growth outperforms existing homes by 20%

The latest research by Unlatch, new homes progression and aftercare platform for developers and housebuilders, reveals that the annual price growth of British new-build homes has outperformed existing homes by almost 20% in the past year. 

Homebuyers and professional property investors alike are keen to buy homes that can promise good investment returns. So what is their best, most reliable option? Should they be buying new-build homes or investing instead in existing properties?

The current average price of an existing home in Britain is £272,851 having increased by 8% in the last year.  

At the same time, the average price of a new-build has risen from £330,662 to £422,414, marking annual growth of 28%.

New-builds in Britain have, therefore, outperformed existing homes by 19% when it comes to house price performance.

But where in Britain do new-builds offer the very best returns when compared to the performance of existing homes?

On a regional level, new-builds have performed most strongly against existing homes in Wales. The average new-build home in Wales has seen its value increase by 34% in the past year, rising from £246,740 to £331,159. This growth is 23% higher than that of existing homes which, in the same time period, saw their value increase by 11% from £181,199 to £201,633. 

In Scotland, new-build growth of 29% compared to existing property growth of 7% – a difference of 22% – while in the East Midlands, South West, and North East respectively, new-build growth outperformed existing homes by 21%. 

In the East of England, South East, Yorkshire & Humber, and West Midlands, new-build price performance is 20% better than existing homes, in the North West the difference is 19%, and in London, it’s 15%. 

On a local authority level, new-builds are outperforming older properties by the largest margin in Merthyr Tydfil, Wales, up by 38% in the past year, 18% higher than existing homes which have seen their value increase by 20%. 

This is followed by Scotland’s Western Isles where new-build growth of 35% matches against 17% growth for older homes – a difference of 18%.

In East Ayrshire, East Lothian, and Glasgow new-build performance is 17% higher than existing properties. 

Richmond ranks top in London, where new-build house prices have outperformed existing by 14%, while Bexley (12%), Camden (12%), Hackney (12%) and Tower Hamlets (12%) also rank amongst the highest in the capital.

Lee Martin, Head of UK for Unlatch says:

“New-build homes are increasingly desirable. Their overall finish and quality has improved dramatically over the past decade and they are vastly better than older properties when it comes to energy efficiency and fuel consumption. In today’s world, this looms large in homebuyers’ minds, even more so since the cost of living crisis kicked in.

This is not only true for end users, but also for investors alike. Investors on the whole do prefer to go for a new build property for many reasons, one more being that by the time said investor completes on their purchase, the agent usually already has a tenant lined up to move in; meaning no void periods. 

In a fast, frantic, and highly competitive housing market, new-builds also offer more reliability in terms of the actual purchase itself. Fewer sales are subject to falling through as a result of unwanted discoveries during the surveying process, as well as the fact there is no dreaded chain to contend with. 

Of course, this heightened attraction does mean that new-builds have seen a far greater level of house price growth when compared to the existing market, but the flip side to this is the fact they also make a far sounder investment.”

Data tables Data tables and sources can be viewed online, here.

New-build price growth outperforms existing homes by 20%
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New-build price growth outperforms existing homes by 20%
BDC October 2022 issue - 297

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