Still, you may find yourself asking: is buying a new build a good investment? Are new builds overpriced? Here's our guide to buying a new build property in the current housing market.
WHAT IS THE NEW HOME ‘PREMIUM’?
When you're shopping around your local housing market and visiting mortgage lenders, you will likely hear talk of paying a premium for the privilege of living somewhere that no one else has. This is often referred to as the 'new build premium price' or similar.
While it's true that sometimes new build properties are priced higher than older houses, let's take a moment to think about what you are getting in return. With a new build property, you get a highly-insulated, energy-efficient home that's built to modern standards. A future-proof home with a stylish new kitchen and beautiful bathrooms, brand new appliances, a 10-year warranty, and the prospect of no repairs and minimal maintenance. Compare that to an older second-hand property and the very real prospect that it might need anything from a cosmetic makeover and a few repairs to complete remodelling and a new roof!
Buying a new build house means all the hard work has been done for you and your home is already finished to perfection. If you're buying off plan or reserving your home before the build is completed, you should also be able to choose your kitchen and bathroom styles and other fixtures, fittings and accessories to personalise your brand new house. You’ll simply be able to move in and start living – without having to worry about how to improve. But, with all these features and so much more included from the outset, do new builds go up in value or down?
DO NEW BUILDS LOSE VALUE?
“There’s a perception in some quarters that a new home will reduce in value as soon as you move in, similar to driving a brand new car off the forecourt. But that may be a very short-term issue, if an issue at all,” explains Jon Bryan, valuations manager at property sales specialists Property Perspective.
“If you decide to sell your home while the builder you bought from is still on site then, yes, for a short time your home might compete with similar designs that could potentially sell more quickly or for more money; but only for the very reason that you bought a new home in the first place!
“However that’s very much a temporary issue and once the builder has moved off-site, your home has a big advantage over the competition. That’s because a well maintained, ‘nearly new’ home will most likely achieve more money than a similar size older style property, as there is less maintenance to consider, better insulation, improved energy efficiency, more stylish contemporary kitchens and bathrooms and living spaces better designed for the way we live now.”
So actually, over time, a well-maintained new build property should increase in value. Of course, this is subject to the prevalent housing market conditions and local house prices. Over the same period, an old home might be losing value without some pretty hefty repair work.
Of course, house prices and the property market are always subject to change and market price can fluctuate. However, new build properties are often considered good financial investments because they are ready to live in and often increase in value over time. Even second-hand, new build properties benefit from relatively new fixtures and fittings and will be newly decorated.
New build developments are usually built with local amenities in mind so are often well located for nearby schools and commuting links. Another reason to consider a new build house is energy efficiency - because they're built to the latest standards, new houses often have significantly lower energy bills.
ARE ALL NEW BUILD HOUSES THE SAME?
Not all new build properties are alike, and even what appear to be similar houses at first glance can differ significantly in quality once you delve deeper. That's why it’s important to make sure you choose your new home carefully and buy from the right developer that has a variation of designs to choose from. .
“Similar to buying a new car, the better quality and more premium new build property brands tend to hold their prices for longer, especially if they are well maintained and looked after. If a second-hand home was built by a quality, five-star builder, like Redrow, you will often see their name referenced in the estate agent’s ad and that’s always a good sign,” Jon adds.
So, what are the key things to look for if you want to be sure that buying a new build is a good investment?
HOW TO CHOOSE A NEW BUILD HOUSE:
Choose the right new build property location
It may be a cliche, but 'location, location, location' is important in the property market for a reason! A popular development will often establish a reputation as a desirable place to live in the local area and this will help to keep prices buoyant. Our eight placemaking principles that guide the creation of all our ongoing and subsequent developments.
Carefully designed layouts, aesthetically pleasing architecture, strong kerb appeal, larger than average plots and quality landscaping will give your new home that ‘cut above’ feel for longer. Sensitively designed developments that include new or enhanced wildlife habitats are one of our specialities. Our new build properties are designed to be communities where people want to live. We even think about the birds, the bees – and the hedgehogs!
Choose the right new build property developer
To avoid any chance of your home losing value in the longer term, choose a new build property that offers well-planned space and quality fixtures and fittings. You should choose a new house that meets, or preferably exceeds, modern-day regulations. Many new build developments also benefit from management that helps maintain communal areas. The right residential property management company can help boost the value of existing properties.
Our homes have higher ceilings, taller doors and windows, and deeper skirting boards than the norm. Also, our new build kitchens, bathrooms, bedroom furniture, tiles and appliances are all from top quality, well-known brands. Each new home can be personalised using the specification choices and optional upgrades available in My Redrow.
Check your new build home warranty
Having a valid new home warranty is really important for future-proofing your home and protecting your investment. Every new house built by Redrow, whether on or off-plan, comes with a 10-year NHBC warranty (or LABC or Premier).
The warranty protects things like new house structure and fixtures and fittings for a fixed amount of time, which can help stop a new home from losing value.
How to add value to a new build house
If you're concerned that you might lose money on the purchase of a new build home, consider the ways you can add value to the property over time. This might be through additions, improvements or fixtures.
* Based on the cost of bringing a similar size, older property up to the same standard as a brand new four-bedroom detached Oxford
*Based on HBF analysis of EPC ratings, taking into account the Energy Price Guarantee (EPG) increases on 1 April 2023.
