If you are looking to move house then you might have thought about buying a newly built home direct from the developers. But, what are the pros and cons of buying a new build property?
Here are what we consider to be the main advantages and disadvantages of buying new builds. They include:
- There’s no chain so there’s less stress and you can move in immediately!
- Your home has a warranty – and is cheaper to maintain
- Save money on energy bills and reduce your environmental impact
- Buy in a desirable location and help build a new community.
- There might be delays to the build deadline – and issues afterwards
- There could be a premium to pay – and the prospect of price depreciation
- New builds tend to have less space than older homes
- There may be less choice from the developer for design choice.
Read on to find out more about the pros and cons of buying a new build property.
Advantages Of New Build Properties
One of the biggest advantages of buying a new build is the fact you won’t be buying into a chain. That means, as soon as your finances are in place, you can look to complete the purchase.
It also removes the risk of being gazumped and can help make the whole house move less stressful.
However, be aware that once you have agreed to buy a new build, the developers will often set a deadline for when you need to complete by. This can add pressure if you need to sell your own property to fund the move.
We bought a house once where the seller was moving in to a new build. We thought that would make the process less stressful because it meant our seller was the end of the chain. However, when our buyer started delaying towards the end, the whole transaction became very stressful.
You see, the new build developers were putting a lot of pressure on for the entire chain to complete by a certain date. This had a knock-on effect down the entire chain and us, and everyone else in the chain, felt a lot of stress and worry.
Eventually we were able to complete and everything was OK, but we know our seller found the process more stressful than she hoped buying a new build would be! You have to remember, the developers are not emotionally attached to the sale and so often lose the compassion and patience a normal seller might have.
When you buy a new build property, you can move in as soon as it is finished. You don’t have to worry about redecorating, repairing, or renovating your new home, as everything is brand new and built to your specifications.
That said, keep in mind that lots of people do still have problems with new build properties. If you buy from a reputable developer, you’ll probably be OK, but don’t assume because its a new property that there won’t be any issues at all!
New build properties are built to the latest regulations and specifications, meaning that it’s unlikely you’ll need to worry about repairs for a while. They also come with a 10-year NHBC warranty to cover structural defects.
Add to this the fact many home builders offer their own warranties too, and you’ll definitely gain some peace of mind when buying a new build.
Influence The Final Finish
If your chosen new build is still being built, it may be possible to influence the exact finish inside the property. This could be things like your choice of flooring, tile colour, or even minor alterations to layout.
Whatever it is, it gives you the chance to make the property ‘yours’ and reduce the need to change anything once you move in.
Depending on your eligibility, it may be possible to benefit from government incentives such as Help To Buy when buying new a build property. Many such incentives are only available on new builds.
Help to Buy Scheme UPDATE (October 2023)
The Help to Buy scheme was a government offering that ended on March 31 2013, but it was closed even earlier to new applicants.
The scheme helped budding homebuyers with an equity loan and enabled them to put down a 5% deposit.
Help to Buy was popular because homebuyers could get up to 20% of the property’s value – it was 40% for those living in London.
The loan part of the scheme was also interest-free for the first five years.
More Energy Efficient
As new build properties are built to the latest specifications and building standards, the average new build property is up to four times more energy-efficient than a traditional ‘second-hand’ property, according to Rightmove.
This is because new build properties have better insulation, double-glazing, and renewable energy sources, such as solar panels or heat pumps.
This means that you can save money on your energy bills and reduce your carbon footprint by living in a new build property.
We didn’t buy a new build property but we can certainly appreciate how the energy efficiency can be a big selling point. Our Victorian property has had lots of money spent on it it to try and make it more energy efficient and yet our bills are still relatively high.
While new builds aren’t right for us, that’s definitely one benefit we wouldn’t mind having!
Everything Is Brand New
Many people love the fact that no-one else has lived in a new build property before them. That means everything is brand new and should be spotlessly clean.
Location and community
You can choose a desirable location and enjoy a sense of community. New build developers carefully select the sites for their developments, considering the access to transport, shops, schools and other amenities.
This means that most new build properties are in highly sought-after areas that offer convenience and quality of life – and communal spaces that foster a sense of community among the residents.
Disadvantages Of New Build Properties
Harder To Get A Mortgage
Because new builds are often sold at a premium price, lenders are often stricter with the maximum loan to value (LTV) they will lend for a new build property.
This means you may need to have a larger deposit to be able to get a favourable mortgage rate than you would if you were buying a similarly valued older home.
In addition to this, developers will often only give you 28 days to complete a purchase after you have put down your deposit. This can be a tough deadline for some mortgage lenders to meet.
Property May Not Be Built Yet
Depending on which stage of the build process the developers are at, the house you buy may not actually be built yet. That means you’ll be relying on show homes and imagination to understand exactly how your house will look when completed.
This also means there a risk the property won’t be quite what you hoped it would be when you finally get the keys. Plus, if you are in a chain you may need to consider moving into rented accommodation while you wait for your new build home to be finished.
Questionable Build Quality
Although new build properties are built to the latest specifications and regulations, there is a tendency nowadays for firms to use cheaper materials in order to increase their profit margins.
This is why you’ll often find new builds contain a high proportion of stud walls. These offer poorer sound insulation and can be tricky to affix heavier objects to, such as mirrors and bathroom fixings.
Smaller Rooms And Gardens
Because developers need to maximise the number of properties they build on a site in order to increase their profit margins, new build properties tend to have smaller rooms and gardens.
So, even a 4 bedroom new build house may not be much different in size than an older 3 bedroom house.
Possibility Of Disruption
If the development upon which your purchased new build property sits is not completed when you move in, be prepared for a period of disruption.
Noise, vibrations, road closures, and excessive mud and dirt are all common on housing developments where work is still ongoing.
Of course, any disruption will only last until the development is completed but it’s worth finding out the timescales the developers are working to so you know what you are letting yourself in for!
We once lived near to a new build development and for months on end we were subject to heavy lorries passing and lots of mud and dirt on the roads and pavements.
Not long after the new build development was completed, and we thought the disruption was over, the area suffered unusually high rainfall.
It turned out the developers hadn’t sufficiently updated the drainage and pipework to account for the new estate and many properties in the area flooded. We were lucky that only our garage flooded but some, including people in the new builds suffered worse!
Less For Your Money
We mentioned it earlier but it really is true that most developers price new build properties at a premium. You are paying for the fact that everything should be in perfect condition and under warranty. You are paying for the fact no one has lived there before you.
It’s a bit like what they say about buying a brand new car – it loses value the moment you drive it off the forecourt! A new build property loses some value the moment you move in as it’s now a ‘second hand’ home.
If you want the best value for money, an older property will give you more property for your cash.
Pros And Cons Of Buying A New Build Property – Summary
To recap, these are the Property Road pros and cons of buying a new build property:
- Buying a new build property means moving into a brand new home that is built to your specifications and comes with a warranty and lower maintenance costs
- Buying a new build home also means saving money on energy bills and reducing your environmental impact, as well as choosing a desirable location and enjoying a sense of community.
- Investing in a new build can also involve delays and defects, premium prices and depreciation, less space and character, and less choice and flexibility.
- Buying a new build home can also entail unexpected issues and challenges, such as construction noise, snagging lists, and legal and financial complexities.
Whichever type of property you decide to buy, make sure you check out our guide on how to choose a removal company before the big day arrives.