I like the idea of a new build property. In my mind, they should be more finished, maybe use better materials and benefit from more advanced production techniques. They should be more energy-efficient and I would hope to have less maintenance; however, many of the people I know hate the idea of them. Where is the character? Where is the history? They all look the same.

The one thing that massively puts me off new build properties is that, is it just me, or do they seem much more expensive than other properties? I can understand why they might be a little more expensive – if they are better built, are more energy-efficient, have less maintenance – but they seem exceptionally more expensive. Moreover, those who want the character and the history should be pushing up the prices of older houses so it all equals out…this is what I think anyway.

So what does the data say? For this question, we only really need the price paid data which contains both the price paid (naturally) and whether the property is being sold for the first time (thus what I am taking to be a new build) versus one being resold. To control for size though, we use the combined dataset in this analysis.

On average, new builds sell for an adjusted price of £327k in our dataset whereas those being sold not for the first time go for £264k; the average size of properties for these sales is almost identical with 85 square meters for new builds and 84 for those being sold for not the first time. So far, this is consistent with my hypothesis that new builds are more expensive, and significantly more expensive.

The graph below now controls for the size of the property, where the new build premium is very apparent and larger in smaller properties. For example, a new build of 60 square metres will cost £265k compared to a non-new-build of £213k (a 24% increase); of 100 meters these values are estimated to be £396k and £335k (a 18% difference); and at 140 square meters £490k and £440k (a 11% increase). These are really quite big numbers and bigger than I was expecting.

Of course, the next question is why? Are people more like me and demand energy efficiency and newer techniques? Is it that new builds can optimise better both the types of houses they build and their marketing techniques? It could be one of many things, and perhaps worthy of further analysis.

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