According to the National House Building Council (NHBC), more than 14,900 new homes were registered to be built in the West Midlands last year, an increase of 13.2% on 2016 levels of 13,200 dwellings. Great news when you consider it is one of the highest number of new builds in the region since the pre-recession levels of the Credit Crunch and the uncertainty of Brexit and the General Election.
So, when a landlord recently asked me why the brand-new property she was considering buying was a lot more expensive compared to a second-hand/existing property of similar type, accommodation, location and structure I thought this would make a fascinating topic to do some homework on … homework I want to share with the homeowners and landlords of Coventry.
You might believe that the difference between purchasing a new build home against purchasing a second-hand/existing home is just individual preference. Some buyers/tenants like the ostentatious trendy modern feel of a new home, whilst others like a home that has stood the test of time.
So, what is the right answer? Well, I am going to be looking at some statistics that shows there is a real difference in the Coventry City Council area’s property market when in to comes to new vs existing homes and the price paid. Looking at the average price paid for existing (second-hand) versus a brand new home since 1996, one can see from the graph it makes interesting reading
On this second graph, one can see the percentage difference in average price paid between new and existing…
Yet possibly nothing is ever that easy, as there are issues with these statistics.
The overall average for the whole Coventry City Council area for the ‘new build premium’ (new build premium being the additional price a buyer pays for buying a new property compared to a second-hand one) over the last 21 years has been 41.02%. These statistics actually show that it is problematic to compare like with like because it is impossible to completely separate all the different factors of type, accommodation, location and structure etc.
One would have to have a mirror image second-hand Coventry home and a duplicate new build right next door to each other, then calculate out which Coventry house buyers or Coventry buy to let landlords would pay more for? Perhaps if everything was the same (all things being equal), there might not be any difference in what buyers would be prepared to pay… but then again, it’s like new cars versus cars that have a few hundred miles on the clock … there is always a difference on the forecourt … because things are never wholly equal.
What I do know is that my statistics of the Coventry property market show that new build Coventry apartments are worth more to people than their second-hand equivalents, whilst the difference is negligible between new build Coventry detached houses and second-hand Coventry detached houses.
However, I believe the really important lesson in all these statistics is the fact that ‘new build premium’ for new-build versus buying a second-hand property increases in a buoyant market and reduces in a tougher market. So, if you want to buy new and the only consideration is money … try buying in a tougher challenging property market.
Free tickets to Grand Designs Live
Step into the world of inspiration with our free tickets to Grand Design Live at London’s ExCel 5 – 13 May.
The inspiration starts here…with a visit to Grand Designs Live
Grand Designs Live, proudly sponsored by Anglian Home Improvements, returns to London’s ExCeL from 5 – 13 May 2018. Whether you’re planning a self-build, renovation or are adding the finishing touches, this unique event offers visitors a chance to discover the latest innovations, explore this year’s trends and preview unseen products.
Presented by Grand Designs guru Kevin McCloud, the show is the ultimate day out for any budding grand designer. From free expert advice, new product launches and over 500 specialist exhibitors in six project zones, there is something for every home project at this multi-award winning event.
Claim your free tickets today!!
We have teamed up with Grand Designs Live to offer you FREE weekday tickets or 2 for 1 weekend tickets to event (saving up to £17)*
Click here: www.granddesignslive.com
and enter the code HOA2018 to claim!
*T&C’s: Valid on standard admission tickets only. Tickets must be booked in advance before midnight on 12 May 2018. Saving is based on door rate ticket prices. Free weekday tickets valid between 8 –11 May 2018 only. Subject to limited availability, tickets allocated on a first come-first served basis. 2 for 1 weekend tickets incur a £1.70 transaction fee.
For more information, hints & tips, please like and follow my facebook page: https://www.facebook.com/CoventryPropertyExpert
For a range of relevant video’s please subscribe to my YouTube channel; Coventry Property TV found at https://www.youtube.com/channel/UCRxB2n1Kh-5XwOOpHC4yDTg
If you would like to save time and want me to source the whole market and all agents to bring you the best buy to let opportunities, please follow me on twitter: https://twitter.com/covbuy2lets
For my comments on Coventry’s Property Market, please visit https://www.CoventryPropertyMarket.co.uk
For visual ideas, please visit my boards on Pinterest: https://www.pinterest.com/CovBuy2Lets/
To get an idea of the rental or sale value of your property is, please visithttp://www.newman.uk.com/#proval
Im am also contactable via email: email@example.com or call, text orWhatsApp me on 07864 942 768
My office is located at 2 Greyfriars Court, Greyfriars Road, Coventry, CV1 3RY
Please remember we are also located in Southam, Leamington Spa and Rugby.
We are experienced in Professional Lettings, Student Lettings, Property Management, Block Management, Portfolio Management, Sales and Financial Services.