Best new-build profit potential for housebuilders revealed
The latest market analysis by Unlatch, the new homes sales progression and aftercare platform for developers and housebuilders, reveals where the UK’s new-build premium hotspots are and where, therefore, housebuilders stand to make the most profitable investments.
In the UK, the average new-build house sells for a price of £261 per square foot. This is 11% higher than the average price for an existing home which is £236 per square foot.
This is a healthy premium for new-build homes, but there are some parts of the UK where the premiums are significantly higher and should, therefore, be the focus of intense interest for developers and home builders.
The UK’s new-build premium hotspot is Sunderland city centre’s postcode area of SR1. Here, the average price for an old home is a modest £83 per sq ft. The average price for a new-build, however, is £306 per sq ft, resulting in a huge premium of 268.7%.
In County Durham’s DL17 postcode district, existing properties cost an average of £59 per sq ft compared to the new-build price of £180 per sq ft – a premium of 205.1%.
Meanwhile, in Neath Port Talbot’s SA13 district, old stock prices of £102 per sq ft compare to a new-build average of £270 per sq ft to create a new-build premium of 164.7%.
There are also hefty new-build premiums to be secured in Portsmouth’s PO5 (138.1%); North East Lincolnshire’s DN31 (122.9%); Doncaster’s DN1 (114.1%); County Durham’s DL4 (109.7%); Birmingham’s B18 (102.1%); Liverpool’s L28 (102.1%), and Rhondda Cynon Taf’s CF45 (97.9%).
Lee Martin, head of UK for Unlatch says: “The advantages of new-build homes have never been more obvious or more connected to the wider socio-economic zeitgeist. We have a cost of living and energy price crisis which has put a spotlight on the superior energy efficiency of new-builds is a big advantage. The same applies to our most existential concern – climate change.
At the same time, we continue to face a housing crisis – there simply aren’t enough homes for those who want and need them. New-builds are the only answer to this long-burning problem and deliver much needed stock where it’s needed most.
All in all, buyers are increasingly interested in new-build living which means developers are in a very strong position moving forward. And while national average premiums of 11% are very nice indeed, it’s these new-build premium hotspots that we’ve identified through this research that should really get the house builders excited because they present an extremely attractive proposition when it comes to the profit margins available.”