The price gap between new build homes and existing properties is £64,624, according to ONS House Price Index figures out today.
This difference is driven by the number of new build properties built in the more expensive London and South East regions, which also disproportionately affects first-time buyers, says property data firm Acumen.
Acumen director Andy Sommerville says: “This latest data illustrates the level of the price premium consumers often have to swallow when purchasing a new build.”
Sommerville says the “high concentration” of these properties in London and the South East means that “the average price for new builds is not weighed down by sales completing in parts of the country where prices are relatively lower”.
He adds there is an “urgent need” to boost the supply of stock of this type of housing across the UK.
Sommerville adds: “Doing this will both provide better access to homes outside of London and potentially make homeownership more affordable.” Also, high new build prices hit key first-time buyers harder, says Sommerville, as this group “often rely on these properties for their first home”.
He adds: “First-time buyers have been more prone to income shocks during the pandemic, meaning they may have used some of their savings which were originally intended to be used as a housing deposit to cover living costs.
“Disruption to this group’s income is also being compounded by a scarcity of high loan to value mortgages and tighter lending criteria. These tough conditions for first-time buyers are likely to result in reduced demand for new builds in the future.”
The average house prices in the UK rose 8.5 per to a record high of £252,000 in December, according to the House Price Index. A month earlier, in November 2020, prices had risen by 7.1 per cent annually.
However, UK first-time buyers maintained a strong presence in the homebuying market, despite deposits rising by more than £10,000 last year, according to data from Halifax last month.
The number of first-time buyers as a proportion of all home mortgages remained stable last year at 50 per cent, compared to 51 per cent in 2019 and 50 per cent in 2018, said Halifax.
