How has Brexit affected London house prices? New builds are the only home type with rises in every borough since 2014
New homes have risen more quickly in price than existing properties in every borough in London over the past five years, new analysis reveals today.
It shows that across the capital as a whole, new builds have gone up in value by an average of 25.3 per cent since 2014, while older “second-hand” flats and houses have increased by 20.6 per cent.
The findings suggests the “premium” buyers expect to pay for newly built properties remains intact, even after they have been lived in for several years.
The biggest gap is in the City of London where new-build prices have gone up 12.5 per cent more than those of existing stock.
The next biggest new-build gaps are in Redbridge, Camden and Lambeth. The smallest gap over the five-year period is in Kingston, at only 3.1 per cent.
The pattern is broadly the same over a 10-year period, with new builds outperforming older stock in all but five boroughs and by six per cent across London as a whole.
Since the EU Referendum in 2016, prices of existing properties have fallen by 2.1 per cent but new builds have edged up by 1.6 per cent.
The new-build property market has been hugely boosted by the Government’s Help to Buy scheme, which provides interest-free equity loans of up to 40 per cent on new properties worth up to £600,000. However, today’s findings raise fears that prices have been artificially elevated and could slump after Help to Buy is phased out between 2021 and 2023.
Michael Stone, founder of London agents Stone Real Estate, which carried out the analysis, said: “While new-build homes often come under fire due to the price premium involved, it’s abundantly clear that they have proven to be the best bricks-and-mortar investment option over the past 10 years when it comes to holding value.
“Despite the bumpy ride of Brexit uncertainty over the past few years, new-build property values have increased in every region of the UK, while existing stock has failed to keep pace, or in some cases, even seen a decline.
“This is largely due to build quality and condition. With new builds you can be sure the property is modern, structurally sound and energy-efficient, which are all features a buyer will look for.”