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The current average price of an existing property in the UK is now £272,851, following 8% annual growth; therefore, new build property has outperformed the average price growth of existing homes by 20% over the past year.Regionally, the West Midlands out performed existing property by 20%, the North West by 19% and London by 15%.
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Why are New Builds Outperforming Existing Properties?
New build properties are designed for modern living, with creative use of space, light and airy rooms and open plan living, when compared to older properties, providing its occupants with more useable space. They are also finished to a high standard, with quality materials, so no work is required to move in.
Energy efficiency is high on the agenda, especially with the cost-of-living crisis. New build properties are built to higher energy efficiency standards, meaning that they are cheaper to run. With the impending new rules on rental properties achieving an energy rating of C or higher, new build property has become increasingly popular for buy-to-let investors, as older properties tend to require substantial investment to bring them up to standard, or are just not feasible to achieve the new requirements.
Why are New Build Properties More Attractive to Buy-to-Let Investors?
New build is also highly attractive to buy-to-let investors as they can purchase the property chain free, avoiding costly abortive legal fees.
Home buyers tend to buy nearer to completion of the build, so buying further off-plan can provide substantial cost savings and incentives for investors and they are not competing with a home buyer for their purchase where the home buyer will be prepared to pay more for the property as it is more of an emotive purchase than an investment property.
Investors are able to choose the best property in the development in terms of its position, layout and aspect that will be the most desirable to prospective tenants, in-turn increasing the rent that can be achieved.
Source: Unlatch
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