Homebuyers in Croydon are paying over-the-odds for new-build homes because of the Government's Help to Buy scheme, it has been claimed.

Some developers are charging up to 60 per cent more for new homes than the borough's average asking price, according to new research by property search engine Propcision.

At one new development - the Berkley Group's residential tower at Saffron Square - buyers were paying on average £670 per square foot for apartments, compared to a £420 average across the borough, the research found.

Propcision co-founder Michelle Ricci said it was common for new-build homes to command prices of up to 20 per cent more than existing properties.

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But she believed the widening gap was an "unintended consequence" of the Government's Help to Buy scheme, which allows first-time buyers to get on the property ladder with a deposit of only 5 per cent.

Ms Ricci said: "With this premium pricing, home buyers in London risk being trapped in a new-build unable to move on without incurring losses. The sting becomes more painful when incorporating the sometimes-hefty yearly services charges.

"Based on price per square foot – the most accurate way to value property dispassionately – the current pricing of many new-builds simply isn’t sustainable.

“It appears the price spiral is an unintended consequence of the new Help to Buy legislation."

Ms Ricci advised buyers to "seriously consider comparative prices in the area" before buying a new-build home.

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