Historically, experience tells us that the premium paid for new build properties increases in a strong market but narrows again in a slower market as developers reduce prices in order to achieve sales.
While not directly comparing like for like, it does raise some interesting questions. Few would say that 2017 was a particularly strong year for the market and yet the new build premium continues to rise.
Since 2010, the differential in price for newly built homes compared to second hand properties has steadily widened. In 2017, new properties sold, on average, for 28% more than second hand properties.
This effect is likely the result of a combination of factors including Government support for the sector in the form of Help to buy, the lack of supply of available properties and the rising quality of new schemes.
During the last 3 months, only 1% of residential property sales in West Oxfordshire were new build, accounting for £2.59M in value.