New-build house prices surpass existing homes by 20%

Homebuyers and professional property investors hoping to make a good return on investment might want to consider new build homes.

New data by Unlatch suggest that the rate of annual house price growth among new build homes has outperformed existing homes by almost 20%.

Over the last 12 months, the average price of an existing home has increased by 8%, while new build homes have increased by 28% during this time. 

Overall, these unprecedented levels of growth mean that new build homes in Britain sit at £422,414 on average while existing homes are £272,851. 

Property price increases on a regional level

The new homes progression and aftercare platform for developers and housebuilders also compared property price increases among new build properties and existing homes on a regional level.

In Wales the average new-build home increased by 34% in value in the past year, rising from £246,740 to £331,159. During this same period, existing homes grew in value by 11% from £181,199 to £201,633. 

New build properties in Scotland also saw high levels of growth as Unlatch reveal property prices were 22% higher compared to existing properties. Across the East Midlands, South West, and North East new-build property prices outperformed existing homes by 21%. 

Across Yorkshire & Humber, the East of England, the South East of England, and West Midlands, new-build prices were 20% higher than existing homes.

Property price increases on a local level

Unlatch also reveal that new-build homes are outperforming older properties on a local authority level. 

The largest margins can be seen across Merthyr Tydfil, Wales where new build homes have outperformed old homes by 38% in the past year, and existing homes increased in value by 20% during this period. 

New-build property price growth of 35% was seen in Scotland’s Western Isles. This works out as 18% higher than price growth among existing homes.

New-build house prices have outperformed existing house prices in Richmond as these are 14% higher, Bexley (12%), Camden (12%), Hackney (12%), and Tower Hamlets (12%).

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.”