London homebuyers purchasing off-plan properties could see the value of their investment rise by more than £26,000 before completion, latest research from Foxtons suggests.
The estate agency analysed new-build house price growth across the capital over the last five years and found that values have increased by an average of 0.23% per month. Based on the average 21-month build period, buyers purchasing off-plan today could benefit from a 4.9% increase in value before collecting the keys.
With the average London new-build now priced at £535,157, that equates to a potential uplift of £26,255 during construction.
The gains are even more pronounced in some of London’s prime boroughs. In the City of London, where the average new-build home costs £1.07m, buyers could see a potential increase of £55,291 before completion. Islington buyers could gain £40,244, while Richmond upon Thames could deliver an uplift of £35,268.
LONG-TERM VIEW
Foxtons says the findings help explain the continued appeal of off-plan purchases among both domestic and international buyers, particularly in sought-after locations where supply remains constrained.
Amit Masrani (main picture), Sales Director – New Homes at Foxtons, says: “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.”
Foxtons says off-plan purchases can also offer other advantages, including access to brand-new homes with modern energy efficiency standards, the ability to personalise finishes, and the opportunity to secure developer incentives such as stamp duty contributions or upgraded specifications.
STRATEGIC MOVE
Joel Ellis-Duffy, Sales Director – New Homes at Foxtons, adds: “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.”
The research comes as developers continue to target overseas buyers, with Foxtons recently joining Berkeley Group in Hong Kong to showcase London developments to international investors and owner-occupiers.
