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Are new-build homes too expensive for this generation of buyers?

Data from Openpropertygroup.com calculated affordability ratios based on new-build house prices compared with workplace earnings.

Richard Reed

New research shows that the North-West is the most affordable region and Cambridgeshire is the most affordable county to buy a new-build house.

Openpropertygroup.com analysed data to calculate affordability ratios based on comparing new-build house prices with workplace earnings.

The higher the number/ratio, the less affordable, on average, it is for a resident to buy a house in their local authority district.

Worcestershire is the least affordable county to buy a new-build house, scoring the highest  ratio of 13.58. It was closely followed by West Sussex with a ratio of 13.41 and Warwickshire, which scored an affordability ratio of 13.23.

Most affordable counties

At the other end of the scale, Cambridgeshire, Cumbria and Derbyshire topped the ‘most affordable county’ charts, with ratios of 7.06, 7.58 and 8.11 respectively.

Openpropertygroup.com managing director, Jason Harris-Cohen, said: “It is no secret that newly built houses carry a price premium. Buyers are paying extra to be the very first owner of a property that’s immaculately decorated, kitted out with the latest appliances and built to be energy efficient.

“The privilege of a turn-key ready property is, however, something that many purchasers are willing to pay for – especially in the most popular locations.”

Openpropertygroup.com, which helps vendors move by buying houses directly, says the government is well off its target of delivering 300,000 homes a year by the mid-2020s.

Skills shortage and Covid

A skills shortage has been compounded by the Covid pandemic, with experts estimating the UK won’t reach the government’s desired level of house building until 2032.

While there has always been a North-South divide when it comes to the cost of buying a brand new home, Openpropertygroup.com’s latest analysis shows the gaps are closing.

The firm says it is inevitable that the ‘race for space’, where flats have fallen out of favour, and the great escape to more suburban and rural areas, is pushing up the value of new homes outside Greater London. This is further exacerbated by the shortfall in house-building.

“Although it’s still possible to rank where is most affordable in terms of new home purchases, the gap between the cheapest and most expensive places is not as stark as you’d imagine,” added Harris-Cohen.

October 13, 2021

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