The landscape of home ownership is changing, with a noticeable increase in property demolitions and rebuilds as owners seek more cost-effective alternatives to purchasing new-builds. Recent studies by the estate agent comparison website, GetAgent.co.uk, indicate a 3.7% rise in such projects over the past year, with homeowners potentially saving around £70,000 compared to buying a new property.
GetAgent’s comprehensive analysis encompassed the frequency of property demolitions across England and compared the costs of rebuilding from the ground up versus purchasing new homes on the market.
Interestingly, while the past decade has seen a general decline in the trend of demolishing properties, the tide seems to be turning. Only 5,680 homes were torn down in England last year, marking a 62% decrease from the figures a decade ago. Despite this, the past year has witnessed a 4% increase in demolitions, overturning a 34% decrease observed in the prior year.
This resurgence is most prominent in the North East, which recorded a staggering 240% surge in demolitions over the past year. London followed suit with a significant 138% increase.
The reasoning behind this shift? Current market trends might hold the answer. Despite a recent cooling, house prices have soared during the pandemic and remain substantially higher than their pre-pandemic levels. Presently, the average new-build in England demands a hefty £421,005, following a 14% climb over the past year – an increase of £51,292. Even the cost of an average detached home has risen by nearly £11,000 within a year, currently standing at £488,853.
In stark contrast, demolishing a house is estimated at approximately £32,000, with the rebuilding costs for a three-bedroom semi-detached home pegged at £295,778. Despite a 21.3% increase in this expense over the past year (£51,889), the total cost of £327,778 is markedly lower than that of purchasing a new-build in the prevailing market.
Thus, homeowners aren’t just enhancing the size and potential of their properties but are also updating them to new-build standards, all the while saving a significant amount of money.
Colby Short, Co-founder and CEO of GetAgent.co.uk, remarked on this trend:
“Demolishing your home and starting from scratch may seem like a daunting, expensive task and the cost of doing so will certainly depend on a number of factors such as size, location, professional trade requirements and so on. Not to mention the fact that you will be effectively homeless for a period of time which can cause a great deal of inconvenience.
However, for those with the ambition to tackle such a project, it could pay dividends in the long run.
While the cost of rebuilding a home has climbed at a similar rate to the price of the average new-build home over the last year, the overall cost of doing so does come in significantly cheaper than the cost of buying new.
This is no doubt a contributing factor to the uptick in demolitions over the last year, with many homeowners simply unable to take the next step up the ladder due to the pandemic boom in house prices.”