Newbuild vs 2yr Old House

oz0707

Is there typically a premium that is paid for a new build as opposed to house which has been lived in for a couple or few years? Obviously new builds fetch more than a 60's/70's build in most cases but does this premium last?

poppysarah

Look at local new build estates where repos have happened. The price plummets.

oz0707

Point taken. However this is an infill plot (not on an estate or surrounded by new build properties). Also the answer I was looking for was based on a stale market. Ie no crash like we have recently experienced. Sorry for not clarifying.

Ian_W

oz0707 wrote: »

Obviously new builds fetch more than a 60's/70's build in most cases but does this premium last?

I wouldn't pay a premium for a new build over a 60's/70's (or earlier) build unless the house was in need of serious work/modernisation/repair.
Modern houses tend to have smaller room sizes and much smaller plots. Folks tend to pay for the "lifestyle" the show house cons them into believing the house will deliver, but instead end up with 12 to 18 months of chasing the builder over snagging issues.

Doozergirl

The misconception is that the premium paid is for you - the quality of the product you buy. It's totally wrong. The premium is paid to the developer because they create that misconception. They charge a fortune because they have a fancy showhome and people think that brand new houses are like brand new cars - they are - they aren't worth as much once you've driven them and they do take time to bed in before they perform at their best.

A 2-3 year old house is a much better buy. A brand new house is not perfect; without fail they will snag, plaster shrinkage is a certainty which leaves cracks, leaks from incorrect plumbing joints etc. or perhaps worse - heavy settlement or defects. The first owner will have already been through that so as second owner there are no surprises.

I turn old houses into effectively brand new ones. I can't prentend that the plaster won't shrink, that a switch on a socket doesn't work for some reason or that the brand new boiler decides it doesn't want to work one day - but I'll get it fixed. When you have that many brand new things, sometimes things don't work properly - it's inevitable when you've spent six figures on materials!

Mark_In_Hampshire

Put it this way: what's worth more, something new, or something second-hand?

If you buy a new build, it's only new once.

Generally you pay a premium for newbuilds, which isn't justified as the quality of the properties from the likes of Barratt, Copthorne etc is frankly abysmal (walls that bow when you lean on them, window handles that break off, poor finishes etc)

I'd only even think about a new build if it's detached (unless you want to get out of the bath to answer the phone and then get halfway down the stairs with a towel round you to find it's your neighbour's phone that's ringing)

That said, in the sort of market we have now, while an owner occupier can sit stubbornly refusing to be realistic about the prices, you can sometimes get good deals from developers desperate to sell. Just consider the value (to you, of the overall package, not just monetary) to you of the newbuild versus a (probably) much larger older and better quality home.

tyllwyd

In our area - you would expect to pay slightly more for a house which had never been lived in, as opposed to the same house a couple of years later on. I think people like to buy from the developer - they might be able to offer incentives, the house is empty when you move into it, everything is brand new (although whether all those brand new things are good quality is a different question ...) But in my opinion there is something to be said for buying a couple of years later when things have settled down.

Whether people would pay more for a modern house rather than a 1960s/70s house is a totally different question. I'd say they are selling to different markets, and a lot depends on the particular estates in your own town. In our town, there are various different estates which have been built in the last 20 years, and price for equivalent houses depends a lot more on the location of the estates and how desirable they are perceived to be, and that goes for the older houses as well.

oz0707

I agree with Tyllwyd and Mark. It is only new once. However I still think that a 2 year old house will fetch more than a ten year old one (exact same houses) as everything is newer (appliances, shower etc) and has settled. Ian although you wouldn't pay a premium and from others experiences and the modern dimensions this is justified the majority of people will pay extra for a new house.

I also agree with the fact that a 2-3 year old house is a much better buy for someone as everything has settled and what you see is what you buy. I am building a detached bungalow and although it will be tempting when done to get my cash and move on I think I will live there for a couple of years. Could always re mortgage to raise cash (defeats purpose though i suppose).

Doozergirl

I think as a small developer it's hard to charge a premium anyway because people are wary of new developments by small builders.

wymondham

A house thats 20-30 years old is going to be much better than any new house generally, and a 2 year old house would be better than new. The quality of materials used today is lower, as are the plot sizes. Rooms in older properties are much bigger as are more storage areas generally in older properties. I really dislike cardboard walls as well!

silvercar

Advantage of a 2 year old property is that the first owner will already have done some of the essentials that builders never do - curtain rails, carpets, garden, wardrobes, cupboards...likewise the snagging issues should have been resolved and the plaster cracks sorted.

then you negotiate on price, by telling the seller that its no longer new, so don't expect a premium