HELP DESP NEEDED - Do You Lose Money on New Builds...?

peachie1509

I have my heart set on a new build and my brother who works as an estate agent is adamant it is the wrong thing to go for as he has said that New builds depreciate in value. That in say 5 yrs time I could have lost £30k in the property. Should I want to sell I wouldnt be able to and I will get myself into a mess financially.
Can anyone help? Is this the case? I am set on this place BUT will not proceed if of course once I have done my due diligence I find out it is the case.
Thanks in Advance

ILW

All depends on the market in general, but anything new will tend to carry a bit of a premium.

kingstreet

New builds can be comparable to new cars. The minute you drive them off the forecourt, they fall in value.

You pay a premium for a new property which won't apply when you come to sell. Have a look around the area you want to live and see what similar second hand properties are selling for.

myhouse_2

I'm quite keen on modern housing and have been to many new build sites. Even the builders will admit there's a premium on new houses. People don't mind in a rising market, but if the market is flat or dropping (as it seems to be), you are likely to crystalise a loss if you sell within a few years.
I've been looking at show houses because it's easy to do so - no appointments etc, but will probably end up buying a second hand house unless a builder offers me a real discount (not the 5-10% discount plus carpets that they give as standard).

hcb42

I wouldnt go near one myself.

You tend to find you are living on a building site for years, and as new houses are being built, why would anyone want yours?

If you are 100% convinced it is your home for the next 20 years, do it, if it is a short term thing, then dont

JQ.

Yes, your brother is quite right to be concerned. New builds do carry a premium. If the market remains static during your ownership when you come to sell you'll make a loss. If the market falls then you'll be in an even worse position.

taxsaver

There you have it... not one vote in favour of new builds and you can add mine to that too!

mbga9pgf

You can always haggle off the price. Go for a big number to start with. 20% is about right, making it quite clear in the current market they have to make the offer attractive as possible or you are going elsewhere.

ruggedtoast

The idea of living in a brand new modern house on a purpose built estate is quite attractive. In reality the newbuilds I have seen are poorly built, in so so areas and have a lot of mandatory social housing attached to them.

G_M

Look at it this way. A new development is nearly complete.

There are a few brand new houses for sale, + a few that were sold 6 - 9 months ago that are now being resold.

If the price were the same, would you rather have the brand new or the 2nd hand? Thought so! So you'd be prepared to pay a bit more for it - or to put it another way, the 2nd hand ones will be worth less.

gordonbennet

Take a look at any 'new builds' from 5 years ago. They once looked very sparkly and attractive. Now they look a little tired and less inviting, and therefore less valuable than the next lot of new builds being put up round the corner.

Don't be fooled by ANY discounts. They can fiddle those with a higher starting number! Do a direct price comparison with similar size, but much OLDER properties on the market recently. Find out how much they actually sold for, and that's a better guide to how much you should pay.