A UK new-build property
Should you buy a UK new build property or an existing property already built? You often see news in the press moaning that not enough new homes are being built in the UK and that there’s a vast shortage of housing. In fact, government figures show 162,180 were built last year (2018). That isn’t enough to fix the housing shortage but it does mean most of us will come across a brand-new property when we are out house hunting. Here are some pros and cons of buying a brand sparkly UK investment property new home straight from the developer against an existing home already built and for sale on the market.
Pro’s of buying a new build property in the UK
Unpack and go – A new home is a blank canvas with fresh tiling, paintwork, kitchens and bathrooms. This means there should be very little, if anything, you need to do to it. You can simply unpack your belongings and start enjoying your new home.
A boost to buying – For many first-time buyers a new build home is the only way they can get onto the property ladder. That’s because schemes such as Help-to-Buy and Shared Ownership are only available on the purchase of a new home.
Incentives – Some developers will throw in extras in order to get a sale. This could mean paying your stamp duty or covering the cost of carpets.
Modern living – Top-spec new builds have all the latest technology. Many offer ‘smart home’ features and open-plan layouts. Some also have shared services such as a gym or concierge.
Design a home – Buy off-plan and you may be able have a say in the design. The builder may let you choose fittings and perhaps even the layout.
Low bills – New build homes have to comply with the latest building regulations. This means they are far more energy efficient than older properties. Data from Energy Performance Certificates shows over 80% of new homes have the highest A or B ratings. That compares to just 2.2% of existing properties.
Chain-free – As you’ll be the first owner you won’t have a chain of buyers above you. This can take away one of the main stresses of buying a home.
Warranties – Most new builds come with a warranty, which you don’t get with an existing home. But, a warranty doesn’t cover everything you might expect. Find out more with our guide to New Home Warranties.
Got more than one new-build to choose from? Read our guide to Choosing the Best New Home Builder
Con’s of buying a new build property in the UK
Space – Some U.K property developers pack a lot of properties onto a site in order to maximize their profits. This can mean a new-build home is less spacious than an older property. We know from speaking to purchasers this can particularly affect storage space. Its a good idea to check that your furniture fits and that your car will get into the garage.
New home premium – A lot of the benefits of buying a new-build disappear on the day you buy it and it is no longer “brand new”. This means a one-year-old property may fall in value as buyers look at the new-builds popping up in the development across the road instead. Our advice is, if you are buying a new-build, plan to live in it for the longer term. Also there is a new build premium usually added by developers into the cost of building new homes to ensure that they have sufficient profits to pay their shareholders.
Leasehold – Many new build properties are sold as leasehold rather than freehold. Tread carefully and make sure your solicitor explains costs, charges and restrictions set out in the lease. Find out more before you start looking round showrooms with our guide to Leasehold Charges. The length of the lease is also critical – it should be at least 90 – 120 years and preferably 999 years. Furthermore, the government is planning to ban the sale of leasehold houses (while leasehold may make sense for flats there is no reason for a stand alone house to be leasehold) so avoid these at all cost.
Tied to a solicitor – We often hear from our users that a developer insisted they used their recommended conveyancing solicitor in order to purchase a new-build. This should be avoided at all costs. A good solicitor with experience of new build conveyancing but not partnered with the developer will ensure that the contract is in your favor, that your deposit is fully protected and that there is a ‘long-stop’ completion date for the property to be finished by. The developers solicitor and sales team will exert huge pressure on you to complete, while a conveyancing solicitor chosen independently is less likely to bend under pressure.
Quality and Snags – New builds often get a bad press with stories of poor quality making the headlines. Even with the best new build home, you can still expect snags like doors getting stuck on new carpets or a loose tile. Whether it’s a significant structural issue or a series of small annoying snags, be prepared to have a snagging survey as soon as the developer will let you on site. This way a professional who knows what they are looking for will be able to reassure you everything is as it should be. They will also liaise with the builder to get everything sorted out.
Delays – New builds don’t always run to plan and it isn’t unusual for the move-in date on a new build property to be delayed. This could just be an inconvenience, but if it goes on it can cause added stress and add to your costs. We hear from people daily struggling with unexpected rent and storage costs, having moved in to alternative accommodation awaiting their new builds completion. Too long a wait can also affect mortgage offers.
Pro’s of buying an Existing property in the UK
Britain has a long history of building beautiful homes, from a Victorian terraced house to a more modern mock tudor house to everything in between. There are plenty of older properties that could turn your head during the hunt for a new home.
Pros
- Character – From the sash windows of a Georgian property, a fireplace in every room of a Victorian home, or the stained glass panels of 1930s suburban homes, there are so many different designs to choose from in our existing housing stock. It’s these period features many of us fall in love with when looking at to buy.
- Community – An existing property is more likely to be surrounded by a community with neighbours who’ve lived there for years. There may also be more nearby amenities such as established restaurants and pubs.
- Space – Older homes tend to be larger with more spacious rooms and gardens.
- What you see – Unlike buying a new build off-plan, what you see is what you get with an existing property. Get a good survey done and you can buy a property safe in the knowledge you know everything about it.
- Potential – An existing home may not be perfect, and could need a bit of work. That gives you the opportunity to put your own stamp on it, and potentially increase its value.
Con’s of buying an existing property in the UK
- Chains – Buy an existing property and you will have to deal with the owners and any onward property chain that they are in making the buying process more stressful.
- Maintenance – Unlike a new-build you can expect maintenance to start needing to be done on day one of moving into an existing property.
- Energy efficiency – Older properties are unlikely to be as energy efficient as a new build. So, your monthly energy bills could be higher.
- Renovations – You may want to redecorate or replace a tired kitchen or bathroom. You need to factor those costs in to your budget.
There is no right or wrong choice when it comes to deciding between a new-build home or an existing property. It comes down to your personal preference and what you want to get out of your new home. Just make sure you have all the information about your preferred property before you exchange contracts to buy.
If you are an expat there are more advantages to buying an new build property because of some of the reasons listed below.
- Being overseas you have a disadvantage as buyers and professional landlords get first pick on existing built property.
- If you are new to being a landlord the new build route is a slower pace and so can be a big advantage when buying.
- New builds tend to rent quicker as tenants like new kitchens and bathrooms and that new home feel.
- You are covered by a 10 year NHBC guarantee which protects you in the event of anything going wrong structurally with the property.
- Unscrupulous sellers of faulty properties often target overseas buyers in the hope they pay cash and dont require a valuation. This way overseas buyers dont find out what faults lie within the property until its too late.
- Mortgage wise overseas buyers have a lot more time as arranging an expat mortgage on a new build property allows them more time as there will be a completion date scheduled.
Premier Expat Mortgages specializes in securing expat mortgages, expat life insurance, expat secured loans and commercial mortgages for expatriates worldwide. Our dedicated team ensures seamless transactions and competitive rates for expats purchasing property overseas or refinancing existing mortgages.
