For detached houses, new build stock is much less likely to be offering something superior to the existing stock in established housing areas. In fact, period homes are likely to attract a premium. New build detached homes do not raise the bar on quality in the same way as new build flats.
However, this is not comparing like with like – the data is not telling us that a new flat would achieve 63% more than a second hand flat of the same quality in the same location. But it does highlight an interesting trend. This substantial premium reflects the change in style and specification of new flats compared to the existing stock – a steep rise in quality and a parallel shift in buyer preferences.
There is another element to a new build premium that may not be evident in current market conditions. In previous research, we have found that the new build premium increases in a strong market and narrows in a weak market, as developers are generally more willing to reduce prices in order to achieve sales. This 2017 data indicates that the new build premium may be beginning to rise. It is something we will return to in up-coming graphics and blogs.
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