Gap between existing homes and new builds widens 11%
The price gap between existing homes and new builds has increased by 11%, according to HouseScan.
A decade ago the average price of a new build in Britain was £204,319, 19% more than the average existing property at £171,781.
However the average price of a new build is now valued at £314,242, 30% more than the average existing property at £242,018.
As a result, new build homebuyers are currently paying a £39,685 premium, which is £7,147 more than they were a decade ago.
In London, new build properties sell for 2.3% more than existing properties, however 10 years ago, new builds sold for 3.2% less than existing homes.
In the South East the average new build home would cost £20,840 more than an existing home in 2010; this gap has now extended to £41,935.
Meanwhile, Yorkshire and the Humber has seen prices remain broadly in line over the past 10 years, with the gap between new builds and existing properties rising by £545.
The research also detailed that not all new build homebuyers are paying a higher premium compared to a year ago.
In the North East, the average new build sold for 37.3% more in 2020; a premium of £44,444.
Today, this premium has increased to 52.9%, the largest increase of all UK regions at 15.6%.
Conversely, the gap between new build and existing house prices has closed, meaning the 52.9% premium equates to £24,906 more paid for a new build property.
Therefore, the premium paid by new build homebuyers has reduced by just short of £20,000.
Harry Yates, founder and managing director HouseScan, said: “I think many homebuyers will appreciate that a brand new home will carry a price premium, in the same way a brand new car will set you back more than a second hand one.
“However, some might argue that to see this margin increase quite considerably in the last ten years is a bit of a low blow.
“Especially when you consider the various issues that have plagued housebuilder reputations, from the leasehold scandal, to the recurring issues surrounding substantial snagging lists amongst others.
“However, it’s also reassuring to see that despite an increase, the closing gap between property values in some regions means homebuyers are actually paying a smaller premium now compared to a decade ago, despite consistent upward house price growth.
Essentially, the best value new build purchase is in the North East as the monetary gap between existing and new build homes is not only one of the smallest, but it’s reduced by the largest margin since 2010.”