Homebuyers are paying record £300k premiums to live in new-build flats in 10 key London areas

New research compares the price of new and used flats sold in 10 key London regeneration areas over the past 12 months - and found substantial premiums being charged in all of them.
The price hikes that developers are putting on immaculate interiors and access to communal perks, from swimming pools to concierge services, now run into six figures, according to exclusive research released today by LonRes property data analysts.
 
The most expensive new homes — relative to similar “second-hand” homes nearby — are in King’s Cross. Here the average price is £868,657, compared with £584,919 for a home which has already been lived in, a difference of almost £300,000.
 
King’s Cross does have some run-down areas on its doorstep, but the premium phenomenon is alive and well in more upmarket areas, too. At Fulham Riverside the average apartment price stands at £1,063,023, compared to £727,364 on the second-hand market, a difference of £335,659.
 
The research compared the price of new and used flats sold in 10 key London regeneration areas over the past 12 months and found substantial premiums being charged in all of them. The smallest premiums — a relatively modest 27 per cent — are being charged at Earls Court and Woolwich.
 
REVEALED: 10 KEY LONDON AREAS WITH SUBSTANTIAL PREMIUMS BEING CHARGED ON NEW-BUILD HOMES


Marcus Dixon, head of research and data analysis at LonRes, says that over the past five years the price of new flats has skyrocketed, overtaking the cost of an older property.
 
“The average value achieved for new flats sold across Greater London has increased by 70 per cent in the past five years, compared with 31 per cent for second-hand flats,” he says.
 
“Much of this increase in achieved prices has been the result of more luxurious developments in higher-value areas of London, with a handful of new developments in prime central London achieving more than double the amount per square foot than neighbouring properties on the second-hand market.
 
“Five years ago the average price of a new-build flat sold across Greater London was five per cent lower than the average value of second-hand flats, by this year the premium for new flats had risen to 24 per cent.”
 
Buying agent Jo Eccles, managing director of Sourcing Property, pointed out that new-build homes tend to be larger and better laid out than period conversions.
 
“One-bed flats in new-build schemes tend to start at around 530sq ft, whereas one-bed flats in period conversions start from around 450sq ft,” she says.
 
“These types of properties are very popular with downsizers; we work with quite a lot of older clients who are selling their family houses and buying in new schemes in order to minimise stairs and benefit from a lift and porter, plus they often don’t want the additional work of maintaining a garden.
 
“We also see parents investing their money in new-build flats while their children are very young so that they can let it out hassle-free and almost forget about it until their children grow older, then sell the property and help them get on the ladder.”

 
John Morley, founder and managing director of Johns & Co, specialises in selling new-build property. He pointed out that modern homes tend to be more energy efficient — and therefore cheaper to run — than their older counterparts. And if the market is on the rise a new-build property can be worth more than it cost by the time it is completed.
 
When it comes to investment, Merton Croisdale-Appleby, a director of Maskells estate agents, says the best buys are in developments in areas where supply of modern homes is limited. “In areas where large numbers of new builds are under construction, with continued new stock on the horizon, it can lead to better-value opportunities for those buying second hand.”

Follow us on Twitter @HomesProperty and Facebook

Comments