APRAO’s latest research, based on Government data, has found the housing market’s recovery is largely driven by the new-build sector, with existing homes still facing market challenges.
Over the past decade, the increase in house prices has been significant for both new-builds and existing homes, with new-build prices up by 73% and existing homes by 63.7%. However, the last year has shown a stark difference, with existing home prices growing by only 0.2%, compared to an 8.1% increase for new-builds.
Regionally, new-build prices have outperformed existing home prices across Britain, with the strongest growth in existing home prices in the West Midlands, East Midlands, and North East. Despite this, new-build prices in these regions grew by 9.2%, 8.9%, and 10.3%, respectively.
In areas where the existing housing market has seen declines, such as the South East, East of England, and Scotland, new-build prices have increased by between 7.1% and 8.2%. London’s existing property values fell by 1.3% year on year, while new-build values increased by 3.3%.
Daniel Norman, CEO of APRAO, said: “We’re now starting to see the market return to health following a period of inactivity caused by restricted buyer affordability as a result of higher mortgage rates… So it may seem strange that it’s the new-build sector driving this return to form… However, this isn’t unusual and while buyers may be paying more initially, they understand that over the long-term, investing in a new home is more cost-effective.”
