New Builds In London Outperform Existing Homes By 17%
Alliance Fund reveals changes in property values across existing and new build markets in Britain, including London.
Based on the data from the Land Registry, researchers at Alliance Fund analysed the real estate market in Britain and revealed several trends regarding new build properties over the last year.
New Build Markets: Key Takeaways
On average, a typical British new home enjoyed a 23% spike in value over 2021 and hit £412k. In turn, a similar existing home saw just a 6% annual spike, reaching £282k. In other words, new builds cost 46% more than an older home and enjoy more rapid price growth. But what are the most heated new build property markets?
Scotland ranks first regarding new home price growth, with average prices climbing by 29% over the last year. By comparison, existing properties enjoyed only a 10% increase.
Another curious destination is the North East, where new build homes command the most significant price premiums. A typical new home costs 74% more than an average existing house (£257k against £148k).
London New Builds
As for the new real estate in London, the market enjoyed a 17% spike in value over the last year, with average prices hitting £593k. In turn, the annual growth rate for existing properties in the capital reached 5%.
With an average new build homes price exceeding £593k, nominal property values in London are by far the highest when compared against other new build property markets across Britain.
Alliance Fund Shared
Experts highlight the strong performance of the London property market throughout the pandemic. However, they say we see signs of a potential market cooldown as we face economic uncertainty, increased mortgage rates, and rising living costs.
The recent market analysis shows that the contrast between new builds and existing homes continues to increase as prices for new homes rise faster than for similar existing properties, including London houses.
Experts attribute this trend to the attractiveness of investing in new builds, as it seems more favourable than investing in older homes. Moreover, energy efficiency and buying incentives like the First Homes Scheme and Stamp Duty tax cut push the appeal of new builds even higher.
