How does the cost of a new build home compare to existing housing stock and where are the highest new build property premiums?
Using the latest data from the Land Registry, estate agent Springbok Properties, has found that the current average price of a new build property is £290,176, compared to £224,729 for existing properties, a mark-up of 29%.
The highest premium was found in Scotland with new builds costing 41% more than existing homes, dropping to 36% in Wales, 27% in England and 25% in Northern Ireland.
While it may be expected that a brand new property will carry a higher price tag recent research found that 40% of new-build homeowners were unhappy with the quality of their property.
Highest premiums
The worst town for new build premium is Harlow in Essex where the average new build costs £551,089, which is 108% more than the average cost of £265,249 for existing stock.
Blaenau Gwent is the next worst area, with a 96% mark up between the new build price of £182,313 and the price of existing property (£92,814).
Gravesham in Kent ranks third with a 95% new build premium while Preston in Lancashire is also home to a new build premium of over 90%.
Rochford and Torfaen in Wales are both home to a premium of 88%, followed by Middlesbrough (85%) and West Dunbartonshire in Scotland (85%). Caerphilly and Merthyr Tydfil complete the top 10 worst areas for new build property price premiums in the UK at 81% and 80% respectively.
For once London home buyers aren’t the focus of bad news and on average the difference in price for a new build and an existing property in the capital is just 3%. Newham is the borough home to the largest gap at 38%, with Redbridge (35%) and Barking and Dagenham (33%) also ranking high.
Shepherd Ncube, founder and CEO of Springbok Properties, said: “While there are many new builds that will be delivered to the standard expected, the thought of forking out way above the odds for a property that falls way below standard is a nightmare scenario for the nation’s homebuyers.
“As the figures demonstrate, in some areas, new build properties are going for a hefty market premium and this isn’t confined to one or two locations, it’s the length and breadth of Britain at a range of market values.
“Of course, if there is a need for housing at a higher price band or quality in any area it should be built. However, one has to question the consistent failures of many property developers when delivering these homes to the standard promised while still charging such a high price compared to the rest of the market.”
By Kate Saines
Source: Mortgage Finance Gazette