Cost of new builds soar as Wales sees highest property price rises across the UK

With the current property market overheating in some areas in Wales the assumption is that many buyers are looking for a character period property nestled somewhere in the countryside or standing on a clifftop enjoying sea views.

And while this is so many people’s Covid-19 pandemic induced property daydream, with prices soaring, supply dwindling and demand continuing to rise, for many house hunters this will remain a dream.

Some might think that ditching the dream of a home oozing with character in a pleasant and peaceful location to focus on a new build may get them more for their money, but this is not necessarily the case – the demand for new builds in Wales, and subsequently, the prices, are also soaring according to figures from the Land Registry.

Read more: Housing market at 17-year high as Wales experiences UK’s highest percentage price rises

Property portal Zoopla’s June House Price Index indicates that following a year of unprecedented demand, the UK property market is facing an acute stock shortage – particularly for family homes.

This latest Office of National Statistics data shows Wales is still the UK’s region with the highest average house price increase – 16.7% in the year June 2020 to June 2021 compared to 13.3% in England, 12% in Scotland and 9% in Northern Ireland. Find out more about that here.

And this includes new build homes. The data analysed by WalesOnline has revealed that the average cost of a new-build in Wales was £267,427 in April this year. That’s up by 22% from £219,076 in the same month of 2020.

But the past 17 months of the pandemic have hit the new build sector with demand still climbing but sites grinding to a halt for a period of time during the Covid-19 pandemic lockdowns.

Subsequently, building supplies and materials are now in shorter supply 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 pandemic property purchasing panic of people looking for more space and a different location, the cost of new build homes has shot up at a faster rate than the majority of existing homes.

It means new build homes in Wales now cost on average 49% more than existing properties; the biggest gap on record, according to the data.

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It means new build homes in Wales now cost on average 49% more than existing properties; the biggest gap on record, according to the data.

However, the new build premium prices, as with any other type of property for sale, varies depending on where in Wales you are looking to buy.

According to data from the Land Registry, Blaenau Gwent has the largest price gap between new builds and existing properties.

The average new build in this county was selling for £221,944 in April 2021 – more than double the average sale price of £106,439 for an existing home.

Meanwhile, the only area where new builds cost slightly less than existing properties is Ceredigion, where the average new build sold for £211,602. That’s 4% less than an existing property at £219,286.

There is a disparity between different types of property buyers too, with this rise in new build house prices disproportionately affecting first-time buyers.

Many new housing developments offer flats and starter homes as a proportion of the site and coupled with schemes such as Help To Buy Wales and shared ownership, this has enabled potential first-time buyers to purchase at the lower end of the market and get on the first rung of the property ladder.

The phase of Help to Buy in Wales is now active and will be available until March 2023.

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New builds come with many obvious benefits, not least having all the latest fixtures and fittings, higher environmental standards and so lower bills. They are also a chain-free purchase for first-time buyers and a closed higher chain for people moving up the ladder.

Some developers even help potential buyers with a part-exchange scheme in order to secure their shiner new build on their site.

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However, the rising cost of new builds won’t necessarily translate to a faster growth in value when it comes to reselling.

Much like a new car, many of the benefits of buying a new-build disappear on the day you buy it and it is no longer brand new.

This can result in, for example, a one-year-old property falling in value as buyers look at new builds elsewhere, which will be enticing to them with newer designs and ‘on-trend’ interiors and no past owner history.

Some people might also consider new housing developments to be sprawling areas that are usually on the outskirts of an urban area so not the most convenient for local facilities and urban centres.

However, new builds can be homes in unique and sort after locations such as by the sea too, such as the latest coastal development just announced by Persimmon Homes West Wales.

Of course, as with existing, older properties on the market, the perceived better location especially by the sea, comes with real-life price premium.

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