PRICES RISING ON NEW HOMES
PRICES are soaring for newbuild homes in Wales. Figures from the Land Registry have revealed that the average cost of a new-build in Wales was £267,427 in April this year - up by 22% from £219,076 in the same month of 2020.
In comparison, existing properties came in at £179,529 on average, which was up 15% from £156,590 last year.
There has long been a premium on new-builds, with these homes usually costing significantly more than existing properties in the same area.
Part of this is because housebuilders have always struggled to keep pace with the demand for newly-constructed homes - and this has only been exacerbated during the pandemic.
Several factors, including the stamp duty holiday, the lifting of lockdown restrictions, increased mortgage availability and low interest rates, have all contributed to a boom in the property market in 2021.
In what online real estate company Zoopla have dubbed the “race for a space”, in March this year buyer demand was running more than 80% higher than the same period in the previous four years, with the supply of homes for sale failing to keep pace with this demand - leaving swathes of buyers scrabbling over a limited number of properties.
At the same time, Covid has wreaked havoc with building sites and new developments, with national lockdowns and strict social distancing guidelines leading to a significant drop in the supply of new-build properties over the last year.
National House-Building Council figures show that between April and June 2020, the number of private new homes registered across the UK fell to around a third of the number seen in the same period of 2019.
While home building has since recovered to pre-pandemic levels, the overall number of private new homes registered between April 2020 and March 2021 was down by 24% on the year before.
Combined with the “race for a space”, this has seen the cost of new-builds shoot up faster than existing homes.
It means new-build homes in Wales now cost 49% more than existing properties, on average - the biggest gap on record.
However, the new-build premium varies depending on where in Wales you’re looking to buy.
Blaenau Gwent has the largest price gap between new-builds and existing properties, with the average new-build selling for £221,944 in April - more than double the average sale price of £106,439 for an existing home.
Meanwhile, the only area where newbuilds cost slightly less than existing properties is Ceredigion, where the average new-build sold for £211,602 - 4% less than an existing property at £219,286.
First time buyers in particular are likely to be impacted by the rapidly rising cost of new-builds.
In some cases the only way to get onto the property ladder is to opt for a new-build, with schemes such as Helpto-Buy and Shared Ownership only available on the purchase of a newly constructed home.