London’s Historic Homes vs New Build Luxury: A Comparison for Buyers and Investors.

Distinguishing between new and old – what are there key differences?

When considering whether to buy a box fresh modern home or a period property, there are three main considerations: cost, character, and convenience. 

New build homes tend to be more expensive than resale properties – just like new cars, you pay extra to be the first ever owner. And, just like new cars driven off the forecourt, once you’ve lived in a property that premium evaporates.

Studies about how much more you will pay for a new home versus an old property vary wildly. Much depends on location, the quality of the new build, and the condition of the older home. Most experts agree that house builders generally expect a premium of ten to 20 per cent for a new build home versus an equivalent older property. This should get you a turnkey, energy efficient home in prime condition, which does not require immediate spending on upgrades. 

Pricing aside, for most buyers the real deciding factor between historic versus new build property is personal aesthetic taste. Older properties have patina, character, high ceilings, elegant spaces and original features, the charms of which outweigh inconveniences like squeaky floorboards or high heating bills for many.

For buyers who value clean lines, high rise views, and want all mod cons, the new build sector has it. 

Is there a secret option 3?

Of course there is a third way in this debate, which is to buy a brand new home carved out of a historic building, an increasingly popular niche in luxury housing. A prime example, and one of the most eagerly-awaited London developments of recent years is Raffles London at The OWO.

The Old War Office was a landmark Edwardian Government building where prime minister Winston Churchill based himself whilst leading Britain through the Second World War. 

An eight-year, circa $2 billion renovation of the splendid baroque building has transformed the space into 85 private residences, more than half of the homes have been sold despite stiff prices (starting at £4m for a studio).

Maintenance and upkeep for older homes vs new builds

Since almost all new homes come with some form of ten year warranty buyers have long-term peace of mind. Buyers of older homes can – and should – invest in all necessary building surveys to make sure they don’t get any nasty surprises down the line. But even if they do, old houses do tend to need more TLC than well-designed new ones.

Another cost to consider is service charge. Period houses – as well as period conversions and small apartment buildings – will have no shared residents’ amenities. If there is any service charge to pay it should be minimal.

New homes with plenty of bells and whistles – residents’ spas and pools – will have much higher costs. Depending on the prestige of the building annual costs can range from as little as £5 per square foot to upwards of £20 per square foot. On the flip side, new homes built to modern standards tend to be cheaper to run than leaky old homes which can cost a fortune to keep warm in winter.

Does location matter?

In a crowded city like London, prime building plots are hard to find.

Most of the best sites in the British capital are already filled with landmark buildings – think the magnificent Nash terraces around Regent’s Park or the elegant white stucco townhouses and apartments overlooking the garden at the heart of Lowndes Square in Belgravia.

Because of this, as a very general rule. older homes tend to have the best locations, on leafy streets close to parks, good schools, public transport, and well-stocked and established high streets. As well as being lovely to live in, these prime locations have stood the test of time which should help hold your property value. Some very luxurious new homes are built on sites which are either slightly off the beaten track or blighted by proximity to railway lines or traffic heavy streets, blights which could cost you when it comes time to sell.

Which has the better investment potential?

Even though the new build price premium fades away once a home has been lived in, over the medium to long term it should be possible to recoup any early losses – particularly if you buy in a well-run building and prestigious building in a popular location and keep the property in excellent condition.

Older properties have lower buy-in costs but tend to need work. Even modest-sounding cosmetic renovation projects have a way of spiralling over budget, and building costs have been on an upward trajectory since the pandemic.

On the other hand, if you buy a new build you can improve it. Adding floor space – a kitchen extension or loft conversion – is the surest way to add value to a property in a market where capital growth is slow. 

Managing a project is a major undertaking, of course, and there will be additional costs like rent if you can’t live there with the work going on around you. But investing in extras like more bedrooms and bathrooms, making living space open plan, and creating really beautiful outside space can all add considerable value. These opportunities are rarely available in a new build apartment or house.

How a buying agent can help manage the buying process

Whether your preference is for a charming period home or a slick contemporary pad, a London buying agent can add value to your search.

A good agent will understand the highly nuanced nature of London’s market – which side of which street is considered the best, and why, exactly which apartment within an under-construction building will have the best views. 

If you’re looking for a historic home, Black Brick can advise on what surveys you need, and connect you with a team of planning consultants, architects, and interior designers who can help you transform the property into the home of your dreams. If you opt for a modern flat, Black Brick can evaluate the location, assess how well managed the building is, and guide you on whether the amenities it offers are worth the service charge.