New build property values climbed by over 23% in the past year, according to the latest research by Alliance Fund.
Alliance Fund analysed the latest data released by the Land Registry, looking at the annual rate of house price growth seen across both the new build and existing property markets and the difference in the house price performance.
The average British new build has increased by 23% in value over the last year alone, now commanding an average of £412,051, and not only this, but sector outperformed the existing property market by staggering 17%.
Iain Crawford, CEO of Alliance Fund, said: “Although the property market as a whole has stood strong in the face of economic uncertainty, we’ve seen numerous signs that the pandemic property market boom has been starting to wane in recent months.
“This has certainly been accelerated by the turbulence seen across the mortgage sector as the threat of increasing interest rates has caused the cost of borrowing to soar.
“However, when dissecting the market by sector, it’s clear that it’s the health of the regular market that’s deteriorating and the contrast between the new build and existing property market is quite stark, to say the least.
“New build values have continued to soar, attracting strong premiums across the board, even in a largely lukewarm London market.
“This undoubtedly due to a realisation by homebuyers that they offer a far superior investment and one that is going to hold its value to a far greater extent, even in the event that the property market takes a dip.”
In contrast to this new build growth, the average existing resale is currently achieving £282,037 in current market conditions, having increased by just 6% on an annual basis.
Not only has the new-build sector outperformed the existing sector when it comes to the average annual rate of house price growth, but the average new build is currently commanding a 46% house price premium versus the wider market.
Scotland ranks top when it comes to annual house price growth performance, with the average new build climbing by 29% in value – by far the highest rate of growth of all areas of Britain.
The new build sectors in the East of England, Wales and the South West have also seen house prices climb by 18% more than the rate of growth seen across the existing market.
However, it’s the North East where new homes are currently commanding the largest house price premiums. The average new build in the region is currently valued at £257,371, 74% more than the average cost of an existing property (£148,327).
Even in a struggling London market, new build house prices have climbed by 17% in the last year.
Crawford added: “At the same time, many new-builds also offer a cost saving, whether that be initially in the form of subsidised stamp duty, or in the longer-term as a result of superior build quality and energy efficiency.
“Something that has come to the forefront of the purchasing thought process for many buyers as a result of the cost-of-living crisis.”
