Tenants are paying a premium of up to 18% more for new-build homes compared to older rental properties, according to a new report from FCC Paragon, a leading lettings and tenant referencing firm. The data, drawn from over 109,000 active rental listings, highlights a growing market preference for modern, energy-efficient properties — and with it, rising returns for landlords investing in newer housing stock.
The report reveals that modern homes, defined as recently constructed or significantly refurbished, are letting for an average of £1,578 per month across England — £159 more than the national average of £1,419. This represents an 11.2% uplift overall, with some regions commanding even steeper premiums.
East Leads in Rental Uplift
The East of England topped the table, where renters are paying a 17.7% premium for new or refurbished homes. Close behind are the North West (17.2%), North East (15.7%), London (14.8%), and the South East (11.9%).
“Modern properties provide all of the same benefits to renters as they do to homebuyers — efficiency, low maintenance, and desirable locations,” said Bekki Leaves, Managing Director at FCC Paragon. “Whether it’s a riverside development or a city-centre apartment block, tenants are clearly willing to pay for quality and convenience.”
Shift in Supply Favours New Builds
Modern properties now account for 41.5% of all available rental listings in England, with the capital leading the charge. London boasts the highest share of modern stock (47.1%), followed by Yorkshire and the Humber (40.3%), the West Midlands (40.2%), and the North West (39.6%).
This growth is attributed to a surge in build-to-rent schemes, small-scale developments, and increased appetite from landlords for off-plan purchases — particularly in urban centres like Manchester, Birmingham and Leeds. The trend is gradually reshaping the lettings market as tenants gravitate toward newer homes offering features such as EV charging, secure bike storage, and A-rated EPCs.
Landlords Reap the Benefits
The advantages for landlords go beyond higher rental income. Newer properties typically come with fewer repair costs, lower insurance premiums, and greater energy efficiency — reducing overheads while appealing to a more discerning tenant base.
James Wetherall, a landlord based in Northampton, recently let his three-bedroom new-build townhouse just two days after advertising. “The tenants were happy to pay £100 more than similar older homes nearby,” he said. “The EPC A rating sealed the deal — they knew their bills would be minimal. I’ve had no maintenance issues at all in two years.”
Outlook: Premium May Persist in Undersupplied Markets
While FCC Paragon cautions that the rent premium for modern homes could flatten as supply increases, the firm suggests this won’t be the case everywhere.
“Given the volume of new developments across the country, we may start to see rental values stabilise,” said Leaves. “But in areas where demand continues to outstrip supply, particularly in well-connected urban locations, modern homes are likely to maintain their competitive edge.”
In an era where energy efficiency and lifestyle quality are top priorities for renters, the message is clear: for landlords, investing in modern property may offer both immediate and long-term returns.