According to figures released by the government in July 2021, the number of new homes built in the UK hit almost 50,000 in the second quarter of the year — the highest number of completions in over 20 years.
Demand for new homes has never been stronger. But is a new build property the right choice for you? Whether you’re considering selling up and moving on, or you’re looking to buy your first home, there are pros and cons to consider when buying a newly-built home. If you talk to a mortgage broker, you’ll no doubt be able to get a clear picture of what you can afford and whether a new build home could be the best option for you.
I have experienced living in both. If you do go for an older home, then you’ll need to make sure that you have some reliable contractors and tradesmen on speed dial as well as exterminators in indiana just in case! On the flip side, if you purchase a new home, you’ll need to make sure you have a good relationship with the company you purchase from as the snag list can be endless. With all that in mind, here are our pros and cons for buying a new build home…
The Pros of Buying a New Build Home
- There Is No Onward Chain
Buying and selling properties at the same time can be complicated and stressful. A property chain is where the sale of multiple houses depend on one another. If the person buying from you is in a chain and the seller of your new home is in a chain, the risk of delays and failed sales increases.
When you buy a new property that has never been lived in before, there is no chain. You buy directly from the developer. This means that you may only have a chain in one direction or none if you are a first-time buyer (FTB), making the house buying process much quicker and lower-risk. If you have a property to sell before you can buy, finding a property cash buyer for your current home will eradicate housing chains in both directions, putting you in a similar position to a FTB.
- It’s a Blank Canvas
One of the biggest attractions of a new build for many people is that you can put your own stamp on it from day one. New builds are typically designed in neutral shades, and many developers allow buyers to choose elements of the layout, design, fixtures and fittings before the property is completed.
There are no previous residents, which means you won’t have to replace highly-personalised decor that isn’t to your taste or put up with a kitchen layout that doesn’t suit your lifestyle. It’s a completely blank canvas that you can turn into your dream home.
- Lower Maintenance Costs
New home builders must comply with the latest industry specifications, so you can move in with peace of mind that everything is in peak condition. Unlike older properties that may have developed a litany of issues over the years, a new build should not present you with any significant maintenance issues for some time.
What’s more, most developers will offer a 10-year warranty for building works and a 2-year developer’s warranty to cover fixtures and fittings. But be sure to check this with your chosen builder. So, if anything does go wrong during this period, you will probably be covered.
- Access to Help-to-Buy Schemes
The Help-to-Buy Equity Loan was introduced on 1 April 2021 to help first-time buyers. It can only be used to buy new-build properties.
If you already own a property, part-exchange (PX) is another scheme that is only available for buyers of new-builds. While PX is not a help-to-buy scheme per se, it’s a quick, easy and hassle-free way for homeowners to sell one property and buy another in one transaction.
- Buyer Incentives
Some developers will try to boost sales by offering buyers incentives to sign on the dotted line.
Examples include offering to pay the buyer’s stamp duty land tax or covering their legal fees.
- Affordable Energy Bills
The double glazing, modern insulation and efficient heating systems used as standard in new properties make them much more energy-efficient. Some will have eco-friendly building materials and technologies too.
As a result, if you opt for a new home, you can expect to pay less in heating and lighting costs.
The Cons of Buying a New Build Home
- The “New Build Premium”
New build properties are more expensive than their older counterparts, and their value will begin to drop the moment you set foot in the door. As with a new car, you pay a premium for having a brand new, no-prior-owners asset.
This can put new properties out of the reach of first-time buyers. The rapid depreciation in value is also off-putting for those who do not envision living in the property for the long term.
- Few Options to View before You Buy
If you buy “off-plan” — committing to purchasing a property before it has been built — you cannot view it before putting any money down. An increasing number of developers are investing in advanced technologies such as virtual reality (VR) that allow prospective buyers to get a good idea of what their future house will look like. However, this service is not commonplace yet, and a virtual walkthrough can’t compare to an in-person viewing.
Buying without viewing in-person increases the risk that the property won’t meet all of your expectations. For example, many people find that their new build is much less spacious than they imagined. Once you have paid a deposit and arranged a mortgage, changing your mind will be expensive, if not impossible.
- Getting a Mortgage Can Be Difficult
Some lenders put stricter lending limits on mortgages for new-build properties. This could mean that you find it difficult to secure the loan amount you need to buy.
If there are delays in the building work, your mortgage offer could expire before your new home is available for completion. Mortgage offers are often only valid for six months.
- You Might End up Living on a Building Site
If you are one of the first to move into the development site, there may be a lot of ongoing building works to put up with. This could mean noise and disruption for months or even years.
- Snags and Defects
According to a survey by New Homes Review, 91% of new-build owners reported at least one significant snag or defect after moving in.
Remember to check what after-sales care the developer offers and cross-check these claims with customer testimonials.
The appeal of living in a brand new home with no former residents is extremely tempting for many people. It can also be a financially savvy move as maintenance and energy costs will typically be lower than those for an older property. However, before jumping in with both feet, weigh up the pros and cons carefully. If you work from home and can’t cope with living on a building site for months or you are concerned about buying a property without viewing it in person, a new-build may not be the right choice for you.
Buying a house is the biggest financial commitment many of us will ever make. Take your time and consider all the options available before making an informed decision about whether to opt for a new-build home.
