The latest research by Alliance Fund revealed that the cost of purchasing a new home has increased by 47% over the last decade.

The end-to-end real estate fund analysed new-build property values over the past 10 years, This was then compared with how the price of a new home on the existing market.

The results show that after adjusting for inflation new-build properties command a 37.3% house price premium versus the existing market. 

After adjusting for inflation, the average new-build property has increased by 10.6% in the last year. That is a 47.1% increase over the last decade. 

The largest annual increase

The South West saw the largest annual increase. New-build homes now command 14.7% more than they were just a year ago. 

With the average new home commanding 93.6% more than it did in 2012, the South West has also seen the best new-build performance over the last 10 years.

In the current market, this new-build house price premium sits at 37.3%. This means the gap has extended by 16.1% between the new-build and existing market.

Over the last year, the price gap between the new and existing market has increased by 11.6%. These results prove the new-build sector has continued to grow and strengthen over the years.

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.”