Modern house-building techniques and the demand for housing generally across the UK means new-build homes remain great options for buyers.
Like the smell of a brand new car rolling off the forecourt, there’s something special about being the first person to live in a property.
And buying new often means you can simply move straight in and enjoy your home, rather than planning renovations or budgeting for work to make an older property your own.
But buying a new home can be as stressful and problematic as purchasing an older property, so knowing what to expect is key.
New-build property guide
In this guide to new-builds, we’ll look at everything you need to know about buying a new home and explore some of the key questions you might have before doing so…
Advice when buying a new property
Most buyers go through a period of research when buying a home, from exploring the area to closely examining properties before making an offer.
And despite a new-build being, well, new, you should do exactly the same thing when buying one.
Even new homes can be problematic, after all, and there is plenty to consider before signing on the dotted line.
How to negotiate a new-build house price
‘But surely the price of a new home is the price you have to pay?’
That’s what many people believe and probably what developers would like you to believe.
But you should always negotiate when buying a new-build in the same way you would when buying an older property.
New-build properties can sometimes decrease in value in the early years after buying one, so ensuring you pay a price that works for you can help negate this.
If you feel a new-build is overpriced, make the developer an offer.
They can refuse this, of course, but sometimes, even if you can’t win the day on price, you can convince them to add things into the deal, like show home furnishings or covering your legal fees.
As with anything, if you don’t ask, you don’t get.
So, ask away…
Having a sound knowledge of the local property market conditions when you come to make an offer can also pay dividends.
Find out how many homes have been sold at the development you’re looking at and what prices those properties sold for.
Is the market slow? Is the developer struggling to attract buyers?
Knowing all this information can put you in a great position to negotiate a bargain.
Is buying a new-build a good investment?
New-build homes can be a great investment.
But, generally, if you’re looking to make money from a new-build home you should be buying with a long-term view.
By that we mean you should be looking to live in, or rent out, the property over a long period of time.
New-builds can enjoy solid capital growth in the right economic conditions but sometimes experience slight downturns in value early on – particularly if purchased at a high price.
You should also consider areas where you can add value to your new-build, so think about things like garden space and room in the loft where you could look at an extension or loft conversion in the future.
Square footage almost always adds value – but only if the space exists to build into in the first place.
Do you pay stamp duty on a new-build?
Yes, sorry, but you do (subject to current exclusions)
New-builds are no different to older properties and stamp duty rules apply.
How much you pay will depend on whether or not you’re a first-time buyer, the purchase price of the property and whether or not it’s a second home (or buy-to-let).
Is Help to Buy only for new-builds?
The Equity Loan part of the government’s Help to Buy scheme only applies to new-build properties for first-time buyers.
The Help to Buy scheme is also now in its final two years of operation and will no longer be offered to buyers beyond March 2021.
Under the scheme, first-time buyers are lent 20% of the new-build’s value as a deposit by the government and only need to find 5% themselves.
When the property is sold, the government claims back its 20% at the new market value, although some buyers choose to pay off the loan during their ownership.
Other things to consider when buying a new-build: Delays
Buying a property ‘off plan’ means purchasing before it is built.
This is an exciting way to buy as you get to watch your new home grow from the ground up and you can often be involved in the styling process, giving you a property that is truly ‘your own’.
However, building homes is rarely straightforward and builds do experience delays.
When buying off plan, always ask the developer to agree to a long stop completion date, which will mean you can seek compensation if your home is not completed by then.
Getting a mortgage for a new-build
Mortgages for new-builds can sometimes be problematic.
As a mortgage offer is usually only valid for so long, so delays to builds can mean that you have to apply again if your offer expires before your home is completed.
Lenders can also be strict on the amount of money they are willing to handover for a new-build due to the fact some homes depreciate in value before they start to grow.
Be thorough with snagging
‘Snagging’ is the process of a new-build buyer running through their property and checking everything is in order.
It’s important to be thorough when snagging as it’s a chance for your builder to put right anything you’re not happy with before you complete your purchase.
Look out for:
- Thin or patchy paintwork
- Lumpy plastering and poorly executed wall joints
- Poor pointing on brickwork
- Badly-installed fixtures and fittings, cupboards and drawers
- Windows that don’t open fully or lock properly or glass that is scratched or marked
- Kitchen worktops that are fitted badly or not level
- Poorly-functioning plumbing, like taps, or electrics
- Slipped or badly fitted roof tiles, downpipes or guttering
If you’re thinking of buying a new-build and want to know more, contact your local Parkers branch who will be delighted to help.