The process of purchasing property comes with many important decisions that will have far reaching consequences in the future. One such choice, includes the advantages and disadvantages of buying a new build property. Whilst there are many benefits to purchasing these brand-new homes, they also come with several drawbacks that potential purchasers should also be aware of before committing to the sale.
To assist, the team here at White Horse Surveyors have put together the following article, detailing all the major pro and cons that you should consider during your property search…
The Advantages of Purchasing New Builds
One of the first benefits that attracts buyers to new build properties is the fact that they have been constructed using all the latest specifications, materials, and technology. When this is combined with the fact that they will be the first occupier, many buyers are drawn in by the assumption that there will not only be less maintenance costs involved but also that their home will be more energy efficient and therefore affordable in the long run. Many prospective homeowners also like the idea that, if you decide to purchase off-plan (before construction has been completed), you can be consulted on some design decisions.
Finally, many purchasers see a new build as being a relatively secure investment because they come with an NHBC (National House Building Council) 10-year warranty. Not to mention the fact that most developers also offer their own guarantee.
The Disadvantages of Purchasing New Builds
However, buying a newly built property can also come with several unforeseen problems, especially if you are purchasing off-plan. For instance, these homes can be subject to frequent delays and hold-ups during the construction phase – potentially leading to other administrative complications (such as your mortgage offer expiring) later in the process.
Furthermore, despite being constructed using the latest materials, a recent survey by New Homes Review claimed that up to 87% of new build homeowners reported teething issues or defects upon their occupation of the property. Similarly, many prospective purchasers have taken issue with misleading plans or brochures that are not accurate representations of the completed homes.
This is where a snagging list may come in useful – these supplements to new build property surveys will detail any of the issues or defects with the home. These are usually smaller items, such as faulty fixtures or poor paintwork, but these inspections can sometimes flag up much more significant problems such as structural inadequacies or faulty appliances.
Lastly, you may also find that the early months (or sometimes even years) of living in a new build are disruptive as many other homes continue to be constructed around you.
Financial Schemes Available for New Builds
If you are a first-time buyer or simply limited by your finances, you may be looking for ways to make savings on a typically expensive new build property. Luckily, there are number of government schemes available to you. These include:
- Help to Buy Equity Loan – A Government scheme that will loan you up to 20% of the property’s value (40% for homes in London), interest free for the first 5 years.
- Shared Ownership – Allows you to purchase a proportion of the house outright whilst paying the rest of in rent.
To learn more about the Shared Ownership scheme, simply check out our blog post on the topic here.
Things to Consider When Purchasing a New Build
In addition to the factors detailed in this article, the following items should also be considered when purchasing a new build:
- Have you researched the local amenities/area? – If you are buying a new build, you will likely be moving into an entirely new area that has only recently been constructed. Because of this, it is important that you take the time to learn about transport links, educational facilities, shops, doctors, and other local resources available to you.
- Have you researched the developers? – Just like any other purchase, it is worth taking your time looking into whatever company is building the property. Especially when the building may not even be completed at the time of purchase.
- Is there a new build premium? – It has been known for developers to charge a premium on newly built homes under the pretence that none of the utilities of fixtures have ever been used. As with the previous point, make sure you do your research and compare the asking price with similar homes in the local area.
- Is the property freehold or leasehold? – You should always check this with the developer before committing to purchase. If it is leasehold, you will have to lease the home from the freeholder for many years.
If you are about to purchase a new build and require impartial advice on your best course of action, please do not hesitate to contact our team of experts for an in-principal discussion.