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There's never been a better time to buy new build

11th April 2014 Print

Jane Pearce, Sales Manager at Devonshire Homes, explains why you could get more for your money with a new build.

Just comparing the latest new build inflation figures and housing market predictions for the next five years, one thing stands out above everything else – buying a new build offers far better value for money just now.

Firstly, new build property inflation has slowed by half in the last year. It fell from 4% in January 2013 to 2% in January 2014. This means that although there is a gentle rise, new build prices aren’t running away as fast as the year before, especially for first time buyers.

And the reason? The Mortgage Advice Bureau says it’s because the Government’s ‘Help to Buy’ scheme has boosted the number of new build completions. This combined with the Chancellor George Osborne’s pledge to extend ‘Help to Buy’ until 2020 has meant that developers such as Devonshire Homes now have the confidence to keep investing in new developments, increasing the amount of new build housing stock.

The slowdown in new build inflation rates is likely to continue or even to fall further. Here in the South West, we’re one of the seven regions around the country that saw more than 1,500 new build completions assisted by ‘Help to Buy’, and we showed the corresponding average drop in the rate of new build inflation.

So new build properties are becoming better value. This becomes even more evident when you put the figures in the context of the whole housing market.
Secondly, this is happening against the backdrop of a slow but steady rise in average house prices, even excluding London figures. Early this year, the average house price in the UK hit the quarter of a million pound mark for the first time ever. It was 9% higher this January compared with last year – and the current rate of house price inflation overall is 3.1% when you exclude London and the South East.

And that’s not all. This January also saw the 13th consecutive month in which typical house prices rose. At the beginning of February this year, estate agents Savills predicted that house prices will rise by an average of 25% in the next five years, with some regions – including the South West – even outstripping London over the whole period. They predict that prices in our region will have risen by 29.4% by 2018. In fact, Savills predicts a rise of no less than 7% and 6% in 2014 and 2015 respectively in the South West. Meanwhile average wages are rising at a rate of only 0.9%.

As house prices have risen by 9% in the last year, the Savills figures seem likely to prove accurate. And if Savills are right, the cost of existing house stock in the South West will rise by 7% in the next year, while the cost of a new build will only rise by 2% or less.

So if you buy a new build sometime this year, not only will you have saved about 5% on the average house price, but the value of your new house is likely to rise by 12.5 -13% in the next two years.

Buy early and off-plan from Devonshire Homes and you could secure even more of a reduction. In short, buying new build right now has never been better value.

To see the new build available from Devonshire Homes in the South West, visit devonshirehomes.co.uk/#home3