New build property values are rising at a much greater rate than existing property values according to a study by DJ Alexander.
The property management firm says that over the last year the average value of new build properties has increased by 8.5 per cent at a time when existing property values only rose by 2.9 per cent.
Wales experienced the greatest average value increase for new builds over the last year rising by 10.2 per cent with Northern Ireland the lowest at 4.8 per cent.
The greatest increase in average value for existing properties occurred in Scotland where prices rose by 4.4 per cent with England the lowest at 2.8 per cent.
Across the English regions the highest newbuild value increase occurred in the East Midlands at 9.6 per cent with the lowest in London at 3.1 per cent. For existing properties, the highest increase was 4.7 per cent jointly in East and West Midlands with London the lowest at a minuscule 0.009 per cent.
The analysis found that this a long-term trend with average new build values increasing by almost 42 per cent over the last five years compared to an existing property value increase of 31.9 per cent.
“These figures highlight the tremendous growth in value of new build properties over the short and medium term. Over both one and five years there is not a single part of the UK where new build price growth has not outperformed existing properties and often by a considerable amount. Ten per cent additional value over five years is substantial and indicates the vibrancy of the new build sector” according to David Alexander, managing director of DJ Alexander.
“The reasons for this may be to do with where these properties are being built. They are more likely to be in areas of growing appeal whereas the existing housing stock may be in parts of cities and towns which were once thriving but may now be in need of some upgrading.
“For individuals and for investors this highlights the value of buying new build over traditional. You get exactly what you want, it is generally designed to the standard that you want and is in a location of potentially like-minded people ... These figures provide further evidence, if it were even needed, to encourage local and national government of the importance of encouraging new builds across the country. Demand is clearly high which is why prices are outstripping those of traditional homes” he says.