The new-build premium: what it really is and how to measure it locally

New homes generally achieve more per square foot than comparable resale stock — buyers pay for warranties, energy performance, chain-free purchase and the absence of a refurbishment job. That gap is the new-build premium, and it sits directly inside your GDV. Get it wrong by five points and a mid-size scheme's land bid moves by six figures.

Why national averages mislead

Published estimates for the UK premium range from 5% to 20% — because the premium is not a national constant. It compresses where the resale stock is young (a 2010s commuter estate) and stretches where resale is tired Victorian terracing. It also moves with energy prices: EPC A/B homes earn more of a premium when running costs are on buyers' minds.

Measuring it properly

1. Take every sale in your evidence radius with a verified floor area.
2. Split by the Land Registry's official new-build flag — first sales of new homes vs everything else.
3. Index both groups to today's money with the UK HPI.
4. Compare average £/sqft: new-build ÷ resale − 1 = your local premium.

Threshold computes this automatically for any pin, and its £/sqft data pages publish the measured premium for hundreds of UK districts — some are +15%, some are near zero, a few are negative where premium resale stock dominates.

Using it in appraisal

Apply the measured local premium to resale-derived £/sqft when new-build comps are thin. Where local new-build evidence is rich, prefer pricing directly from it. And when the premium is unusually high locally, ask why before banking it: a single premium scheme skewing a small sample is not a market.

Data referenced in Threshold is displayed under the Open Government Licence (HM Land Registry Price Paid Data, EPC Register, ONS, UK HPI). All figures produced by Threshold are statistical estimates for site appraisal, not RICS valuations.