Buyers generally pay a significant premium for new-build units, in large part due to the significant marketing campaigns which surround new developments. Research by LCP (London Central Portfolio) has found that in Prime Central London (PCL) this premium amounts to an extra 20%, where the average square foot price for a new build stands at £1,701, compared with £1,418 for an older property.

In 2015 LCP says that 467 new units were brought to the market in PCL, compared to the usual average of 300 new units (+56%). However, elsewhere in Inner London, (made up of the remaining nine most central boroughs and encompassing the new build heartlands of Tower Hamlets and the Battersea to Nine Elms stretch), these boroughs have achieved an even greater new build premium amounting to +25%, where the average price stands at £659,459 compared with £525,307 for older property. In 2015 alone, there was £2.89bn worth of new build sales in these boroughs.

LCP concludes: ‘In a market which is heavily saturated with new developments, with 75,229 in the pipeline, there is a risk to buyers of a substantial oversupply of such units, both to buy and to rent, suppressing yields and prices.’