Budget boosts new build affordability by £132k across England
A double reduction in the cost of getting a foot on the new build ladder via last week’s Budget has boosted new build property affordability by as much as £132,000 in some parts of the market.
Research by snagging and defect management experts, BuildScan, looked at the current average new build house price, the sum saved due to the extension of the stamp duty holiday, the reduction in mortgage deposit requirements between a 5% and 15% deposit, and what this totalled as an initial reduction in the cost of getting on the ladder.
The research shows that the current average new build in England will cost homebuyers £327,486, a 22% premium when compared to the wider national market average of £269,150.
Previously, a 15% deposit on the average new build would have required homebuyers to front up £49,123. However, the ability to secure a mortgage with a 5% deposit will reduce the initial cost required to £16,374, a £32,749 drop in the initial cost of getting on the ladder.
But with the extension of the stamp duty holiday, new build homebuyers are able to secure a double affordability boost when buying.
Without the holiday in place, the average new build homebuyer in England would need to pay stamp duty to the tune of £6,374 on the average property price of £327,486. However, until June they will be able to keep every pound and penny of this sum in their pocket, paying no stamp duty tax on their purchase.
As a result, the average new build homebuyer has seen the initial cost of buying fall by £39,123 due to the Budget. In London, this saving climbs to £65,583 when considering both the reduction in stamp duty and mortgage deposit requirements.
While the least affordable new build market with an average price tag of £1.168m, Kensington and Chelsea is home to the biggest boost in new build affordability. The combined stamp duty saving and mortgage deposit reduction in the borough totals a huge £131,780, with Westminster and the City of London also seeing this combined saving exceed £100,000.
Elmbridge (£90,248) and Rochford (£79,383) are home to the biggest reductions in the initial cost of buying a new build outside of London.
Across England’s major cities the initial cost of buying a new build has dropped by between £20,000 and £74,000.
Cambridge is home to the biggest reduction in new build purchase costs at £73,973, while Bradford is home to the lowest, although new build homebuyers are still £21,096 better off.
Founder and Managing Director of BuildScan, Harry Yates, commented:
“A lot has been made about the savings brought about by the current stamp duty holiday but with the introduction of 5% mortgage deposit products, the financial barrier to buying has just dropped even lower for the nation’s homebuyers.
Regardless of what price threshold you’re transacting at, doing so in current market conditions will see you get a foot on the ladder for thousands of pounds less than you may have otherwise, thanks to the stamp duty holiday extension and a lower deposit requirement.
Of course, this saving is all the greater for those looking to buy within the new build sector due to the generally higher cost of purchasing a brand new home. However, while they come at a premium with regard to price, new build homes return a far greater rate of price appreciation in the long-term.
So the sector provides a great investment opportunity for homebuyers at present with the addition of a Budget boost to affordability.”
| Table shows the boost to new build affordability for homebuyers based on the reduction in the initial cost of buying when combining a stamp duty saving with the rediction in mortgage costs | |||||||||
| Location | Region | New Build House Price | 15% deposit | 5% deposit | Deposit Saving | Stamp Duty Holiday Sum | Original Stamp Duty Sum (No Holiday) | Stamp Duty Saving | Total Saving (Deposit + Stamp Duty) |
| England | NATION | £327,486 | £49,123 | £16,374 | £32,749 | £0 | £6,374 | £6,374 | £39,123 |
| Top 10 Biggest Reductions Across All Local Authorities in England | |||||||||
| Kensington and Chelsea | LONDON | £1,167,805 | £175,171 | £58,390 | £116,780 | £45,530 | £60,530 | £15,000 | £131,780 |
| City of Westminster | LONDON | £1,006,564 | £150,985 | £50,328 | £100,656 | £29,406 | £44,406 | £15,000 | £115,656 |
| City of London | LONDON | £930,033 | £139,505 | £46,502 | £93,003 | £21,753 | £36,753 | £15,000 | £108,003 |
| Camden | LONDON | £820,735 | £123,110 | £41,037 | £82,073 | £16,037 | £31,037 | £15,000 | £97,073 |
| Elmbridge | SOUTH EAST | £752,483 | £112,872 | £37,624 | £75,248 | £12,624 | £27,624 | £15,000 | £90,248 |
| Hammersmith and Fulham | LONDON | £671,776 | £100,766 | £33,589 | £67,178 | £8,589 | £23,589 | £15,000 | £82,178 |
| Rochford | EAST OF ENGLAND | £643,833 | £96,575 | £32,192 | £64,383 | £7,192 | £22,192 | £15,000 | £79,383 |
| Islington | LONDON | £636,980 | £95,547 | £31,849 | £63,698 | £6,849 | £21,849 | £15,000 | £78,698 |
| Hackney | LONDON | £635,482 | £95,322 | £31,774 | £63,548 | £6,774 | £21,774 | £15,000 | £78,548 |
| Merton | LONDON | £629,850 | £94,478 | £31,493 | £62,985 | £6,493 | £21,493 | £15,000 | £77,985 |
| Reduction Across Major Cities in England | |||||||||
| Cambridge | EAST OF ENGLAND | £589,727 | £88,459 | £29,486 | £58,973 | £4,486 | £19,486 | £15,000 | £73,973 |
| London | LONDON | £505,833 | £75,875 | £25,292 | £50,583 | £292 | £15,292 | £15,000 | £65,583 |
| Oxford | SOUTH EAST | £370,087 | £55,513 | £18,504 | £37,009 | £0 | £8,504 | £8,504 | £45,513 |
| Bristol | SOUTH WEST | £312,525 | £46,879 | £15,626 | £31,252 | £0 | £5,626 | £5,626 | £36,878 |
| Leicester | EAST MIDLANDS | £270,047 | £40,507 | £13,502 | £27,005 | £0 | £3,502 | £3,502 | £30,507 |
| Bournemouth | SOUTH WEST | £265,651 | £39,848 | £13,283 | £26,565 | £0 | £3,283 | £3,283 | £29,848 |
| Leeds | YORKSHIRE AND THE HUMBER | £262,422 | £39,363 | £13,121 | £26,242 | £0 | £3,121 | £3,121 | £29,363 |
| Portsmouth | SOUTH EAST | £256,185 | £38,428 | £12,809 | £25,618 | £0 | £2,809 | £2,809 | £28,427 |
| Birmingham | WEST MIDLANDS | £250,065 | £37,510 | £12,503 | £25,007 | £0 | £2,503 | £2,503 | £27,510 |
| Newcastle upon Tyne | NORTH EAST | £249,723 | £37,458 | £12,486 | £24,972 | £0 | £2,494 | £2,494 | £27,466 |
| Plymouth | SOUTH WEST | £235,308 | £35,296 | £11,765 | £23,531 | £0 | £2,206 | £2,206 | £25,737 |
| Manchester | NORTH WEST | £229,237 | £34,386 | £11,462 | £22,924 | £0 | £2,085 | £2,085 | £25,009 |
| Southampton | SOUTH EAST | £224,955 | £33,743 | £11,248 | £22,495 | £0 | £1,999 | £1,999 | £24,494 |
| Liverpool | NORTH WEST | £205,471 | £30,821 | £10,274 | £20,547 | £0 | £1,609 | £1,609 | £22,156 |
| Sheffield | YORKSHIRE AND THE HUMBER | £202,550 | £30,383 | £10,128 | £20,255 | £0 | £1,551 | £1,551 | £21,806 |
| Nottingham | EAST MIDLANDS | £202,425 | £30,364 | £10,121 | £20,243 | £0 | £1,549 | £1,549 | £21,792 |
| Sunderland | NORTH EAST | £197,591 | £29,639 | £9,880 | £19,759 | £0 | £1,452 | £1,452 | £21,211 |
| Bradford | YORKSHIRE AND THE HUMBER | £196,627 | £29,494 | £9,831 | £19,663 | £0 | £1,433 | £1,433 | £21,096 |
| Data sourced from the Gov.uk UK House Price Index – New Build vs Existing | |||||||||
Ends
Notes to Editors: –
– Founder of HouseScan and BuildScan, Harry Yates, comes from a family background of construction and also holds a Construction Management degree.
– Having done the basics of the job for a number of years, Harry launched HouseScan four years ago, then started introducing his bespoke technology in 2020 to fulfil the snagging process properly.
– HouseScan is the new build snagging experts, using their knowledge, expertise and equipment to ensure your new home is as it was promised.
– HouseScan has been employed by thousands of customers buying new build homes from a wide range of different housebuilders.
– The HouseScan inspection and report is not only award-winning but more comprehensive than any of their competitors. HouseScan keeps up to date with all industry changes and regulations and they are also equipped with a range of equipment totalling over £4000 each.
– BuildScan is a multi-platform app that allows users to manage defects, snag lists, punch lists, surveys and project workflow in full synchronisation and with unlimited collaboration. Teams or individual users can manage entire projects through BuildScan, assigning and controlling tasks, workflow and much more for effective construction defect management.
– With BuildScan you can break your projects down into sites, plots and build stages for easy project management, log unlimited snags & defects straight into the BuildScan app, assign these defects as tasks to individuals & contractors within your team, manage and track progress throughout all stages of your project, create, manage & export snagging & inspection reports directly from the app
– BuildScan launched on the 3rd November 2020.
