Figures from the ONS show the growth in houses prices over the year for new builds is more than double that of existing homes.
The latest data from the Office of National Statistics (ONS) shows new build properties for England have experienced growth over the last year of 21.8% compared existing homes which are 7.3% higher.
In London prices for new builds are up 23.3% in the last month with an average £533,630 whereas existing homes are up 9.9% and average £483,906.
New builds are popular with first time buyers, home movers and buy-to-let-investors with higher price rises than the 7.7% increase for the UK, were the average home costs £217,888 in September.
Large rise for new build properties
The strong rise in the price of new build properties make it more difficult for first time buyers as many would consider this for their first home purchase.
The differences between price changes for new build and existing homes are similar across the country and the percentage for the year to September 2016 from the ONS are shown below.
| Region | Existing homes | New build homes |
|---|---|---|
| East of England | 11.1% | 26.1% |
| South East | 9.0% | 24.2% |
| London | 9.9% | 23.3% |
| England | 7.3% | 21.8% |
| East Midlands | 7.1% | 21.4% |
| West Midlands | 6.9% | 21.3% |
| South West | 6.6% | 20.8% |
| Yorks and the Humber | 3.7% | 18.7% |
| North West | 4.8% | 18.7% |
| North East | 0.4% | 14.3% |
New build properties in East of England experienced the highest rise of 26.1% for the year to September.
Over one month London had the highest rise of 4.4% although most areas experienced increases of over 3.0% whereas existing homes were 1.1% or less and the North east was lower by -2.2%.
The rise in house prices has allowed the older equity release buyer to access wealth in their property with a lifetime mortgage, using this to maintain their lifestyle, holidays or home improvements.
Period of stability for housing market
The Royal Institute of Chartered Surveyors (Rics) has reported a fall in September for new sales, a continuing trend for the past 7 months.
Rics has also reported a modest increase in new buyer enquiries, the first increase since February and the volume of house purchases also rose by 3.2% in September compared to August.
In terms of housing supply there has been a 1.3% monthly fall in new-builds, although new-build housing output remains 8.0% higher compared with August 2015.
Average prices and annual change for September 2016 from the ONS are shown below.
| Region | Annual changes | Property values |
|---|---|---|
| London | 10.9% | £487,649 |
| South East | 9.9% | £312,609 |
| East of England | 12.1% | £277,248 |
| South West | 7.5% | £241,262 |
| England | 8.3% | £234,250 |
| West Midlands | 7.7% | £180,551 |
| East Midlands | 8.2% | £175,441 |
| Yorks and the Humber | 4.7% | £151,399 |
| North West | 5.7% | £150,845 |
| Wales | 4.4% | £146,388 |
| Scoltand | 3.4% | £143,006 |
| North East | 1.5% | £125,213 |
| Northern Ireland | 5.4% | £124,093 |
House prices in London are the highest in the country as expected with the average of £487,649 followed by the South east with £312,609.
For first time buyers in London the average price paid for a home is £426,411 whereas home movers paid £550,239 for September 2016.
House prices in England are up 8.3% and average property is valued at £234,250 although the monthly change is only 0.2%.
One advantage of rising house prices for homeowners is remortgage buyers can now release capital for home improvements.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to consolidate debt, holidays or even give to a family member.
Learn more by using the property value tracker chart, mortgage monthly costs calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.
