Buyers purchasing new-build homes off-plan in London could see the value of their property increase by more than £26,000 before they even move in, according to new research from Foxtons.
The agency analysed new-build price growth across the capital over the past five years and found that values have risen by an average of 0.23% per month. Based on a typical construction period of 21 months, that rate of growth would translate into a 4.9% increase in value between exchange and completion.
With the average London new-build home currently priced at £535,157, Foxtons estimates that an off-plan buyer could see the value of their purchase rise by around £26,255 during the build process alone.
The potential gains are even greater in some of the capital’s most expensive boroughs. In the City of London, where the average new-build home commands more than £1m, the projected uplift over a typical build period reaches £55,291. Buyers in Islington could see values increase by £40,244, while Richmond upon Thames could deliver a gain of £35,268 before completion.
Amit Masrani, sales director – new homes at Foxtons, said: “International buyers, particularly across APAC markets, have long recognised the advantages of buying off-plan in London. It provides the opportunity to secure a property in a globally desirable market at today’s price point, whilst benefiting from potential value growth before completion.
“We continue to see strong demand for high-quality London developments from overseas buyers who are taking a long-term view and who value the combination of stability, transparency and growth potential that the London market continues to offer.”
Joel Ellis-Duffy, sales director – new Homes at Foxtons, added: “Buying off-plan has long been a strategic move for those looking to maximise value, and our analysis shows just how effective it can be in the current market.
“Even without additional developer incentives, buyers can benefit from house price growth during the build period, which can translate into a notable uplift by the time the property is completed.
“In a city like London, where entry prices can be a barrier, this also creates an opportunity for buyers to access more premium locations whilst still benefiting from long-term value growth.
“Beyond the financial upside, it’s also about the quality and efficiency of the product itself. New-build homes are designed for modern living, with energy performance and ease of maintenance built in from day one.”
Although purchasing off-plan can deliver significant gains, the strategy does not come without risk.
