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.”

Data sourced from the Gov.uk UK House Price Index - New Build vs Existing
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