New-build price premiums now 52% higher than existing homes

Despite heat rapidly escaping from the housing market, price premiums for new-build property have increased by 20% during the last year and are now on average 52% higher than the average value of an existing home.

Related topics:  house prices,  New build,  premium
Property | Reporter
7th August 2023
Prime New Build 250
"New-build properties have not only continued to hold their own when it comes to the price premiums they command, but these premiums have also grown considerably over the last year"

Research from Sourced Franchise analysed current new-build values, the premiums attached when compared to existing property prices and how this premium has changed over the course of the last year.

The research shows that, with the average British new-build now valued at £425,186, the premium commanded by new homes currently sits at 52%. What’s more, this premium has increased by 20% over the course of the last year alone.

Strongest new-build premiums

Regionally, the North East is home to the strongest new-build house price premiums, where new homes currently command £271,723 - 83% more than the average home in the existing market.

The current premium commanded by new-build properties also sits at more than 60% across Scotland (72%), the East Midlands (66%), the North West (65%), West Midlands (63%) and Wales (62%).

At 17%, London is home to the smallest new-build house price premium in the current market.

At the local authority level, it’s Harlow in Essex that ranks top, where the average new-build is currently worth 133% more than the average existing home. Blaenau Gwent (127%), Gravesham (120%), West Dunbartonshire (119%) and Preston (119%) also rank within the top five strongest new-build markets at present.

Largest increase in new-build price premiums

However, it’s not just the current strength of the new-build market that is impressive against the current backdrop of market uncertainty. Not only do new builds continue to command impressive premiums, but this premium has also increased over the last year.

In the North East, the average new-build house price premium has increased by 25% over the last year, with the North West (+24%) and Scotland (+24%) also seeing similar rates of growth.

At the local authority level, West Dunbartonshire (+25%), Harlow (+24%) and Gravesham (+23%) again rank high, along with Rochford (+23%) and Preston (+23%).

Sourced Franchise Director, Chris Kirkwood, commented: “It’s fair to say that the residential market is stuck in a rut at present, with increasing interest rates causing many buyers to sit on the fence, causing a reduction in market activity, while house price growth has also stalled in recent months.

"However, the market is far from on its knees and new-build properties have not only continued to hold their own when it comes to the price premiums they command, but these premiums have also grown considerably over the last year.

"This demonstrates that the appetite to deliver new homes to market remains strong which suggests that the nation’s housebuilders are unphased by current market uncertainties and have a positive view of the long-term outlook for the market.”

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