The UK housing market is experiencing a dip, with the average house price in England rising by 3.1 per cent in the last 12 months, and property values falling in many areas.
According to the latest figures published by HM Land Registry, in Scotland the average house price is up by 6.4 per cent, but there was no monthly increase for May 2025.
However, this is not the case for all property types, reports MK Citizen, with huge price increases for new-build homes recorded in the last 12 months.
The average cost of a new build home in England has risen by 31.6 per cent in the last year, to £462,864, the latest House Price Index showed. In Scotland, it has risen by 27.6 per cent to £359,880.
During the same period, the average price paid for an existing home which is being resold has increased by 5.8 per cent in England, to £289,750, while in Scotland it has risen by 3.1 per cent, to £172,472.
Why is the price of new-build homes increasing faster than other properties?
There are a number of factors that are impacting the price of new-build homes, cites MK Citizen, the leading one being that supply is not meeting demand.
Only 190,520 new-build homes were completed during 2023/24, according to figures published by the Office for National Statistics (ONS), compared with 210,810 in 2022/23 and 205,150 in 2021/22.
Another factor is the rising cost of building materials and labour, which has increased much faster than the overall rate of inflation since 2020.
A third could be attributed to the appeal of new-builds with their greater energy efficiency, particularly with the cost of household bills over the last few years.
Where are new-build homes rising the fastest?
The cost of new-build homes has risen faster in some areas over others.
In London, the average house price for a new-build home has risen by 23.8 per cent in the last year, which is the lowest percentage increase of any English region.
The biggest increase in the average house price for a new build home was in the North East (39.2 per cent) and the North West (35.0 per cent).