According the Office of National Statistics (ONS), over 230,000 new houses were built last year in the UK; rising from the low count recorded in 2019-20.
With so many new homes being built, and the Government keen to raise those numbers, we’ve seen an increased number of people asking questions about new builds.
What are the advantages of a new build?
New builds are usually more modern than older homes, so may be more equipped with smart home features. They also come with everything pre-installed.
The kitchen, bathroom, bedrooms etc will all be new and unused, so your home should be relatively low maintenance and there shouldn’t be much work to take on when you move in!
There are also some government schemes which only apply to new build properties. The Help to Buy scheme in particular can be really useful for homebuyers as it lends buyers up to 20% of a property. Find out more here.
Built to last
Lastly, new build homes are built to the latest building regulations. This means that energy efficiency would have been prioritised, keeping energy use low and resulting in lower bills!
They may also benefit from renewable energy sources such as solar panels or ground or air source heat pumps such features are likely to make them attractive on the resale market.
What are the disadvantages of a new build?
New builds are often sold at a premium making them more expensive than existing homes. Lenders can also be stricter with how much they’re willing to lend on new builds, meaning you might need a larger deposit to buy your home
In addition, developers can often impose strict deadlines for exchange of contracts. This can be as short as 28 days which can be tricky to achieve if you are in a chain.
Often, new build homes are sold ‘off plan’. This means that the house won’t be fully built at the time of exchange so a fixed completion date can’t be offered.
Completion will therefore be on notice which means that once the house is ready you will be given 10 days to complete.
If you have a house to sell and don’t want to move out and wait for your new home to be ready you will need to agree the same provisions with your buyer. The longer the chain you are in the more difficult this is going to be.
Often any incentives which the developer has provided will be lost if completion cannot be achieved by their deadline.
Withdrawn mortgage offers
In times of rising interests rates you need to factor in that the completion date for your lovely new home might be months from exchange.
Mortgage offers typically have a 6-month expiry date. However, a mortgage offer can be withdrawn by a lender before completion. This could leave you in a position where you have exchanged to buy a house and don’t have a mortgage offer.
With rising interest rates this is a significant risk and careful thought needs to be given as you will still be contractually bound to complete even if you no longer have a mortgage offer.
However, a lot of these disadvantages can be avoided if you find the right home and developers.
Do new build houses keep their value?