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

poppysarah

It ceases to be "new" when you move in.
It will be competing against other "new builds" when you come to sell - including same age and newer houses.
It's probably dearer to start with compared with older housing.

flecker

For once I'm going to say: trust the estate agent Your brother's given sound advice.

shortchanged_2

myhouse wrote: »

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).

How do you know it is second hand? It might be third, forth or fifth.:D

Sorry I just had to laugh at your comment. I've never thought of an older house as being described as second hand. :rotfl:

SuzieSue

I can understand you wanting a new build - I bought one 14 years ago and have been happy with it. Obviously, I bought at the right time in a rising market, so things are very different now.

I was also concerned about depreciation when I bought but I knew that I was going to stay here for the long term. All the older houses I looked at were much cheaper however, they all needed work doing and as neither me nor my partner can do DIY, we decided to opt for a new build.

However, if I was going to buy one now, I would be much more concerned about the build quality as I am sure that builders have been cutting corners because of the recession as they simply havn't had the cashflow.

I would also be concerned about social housing as whereas in the past, it was usually concentrated in one area of the development, I think the trend is now to integrate it throughout the development. I know that 99% of social housing tenants are fine, but you don't know if you will be living next to the anti-social 1%.

k3lvc

Let's put some numbers behind this.

2 years ago I looked at the first new builds on a new estate - could have had my choice of plots and any number of 'discounts' to bring the price down from £350k to £310k with stamp duty paid. I offered £280k cash or £310k with a guarantee that if I came to sell before the development was finished and the developer had reduced the new build prices they would compensate the difference. Needless to say they laughed and I walked away.

Fast forward 2 years to a phone call from the same developers sales team - price now for same houses is £250k + incentives. Needless to say out of the five 2nd hand properties on the estate all advertised between £285k & £330k (:rotfl:) not one has sold.

Mrs_Arcanum

The MSE way to buy a new build is to go for the show house. Generally cheaper & with all the extras.

MobileSaver

hcb42 wrote: »

You tend to find you are living on a building site for years

This is so true and something so many "new build" buyers don't think about.

One of my cousins bought a new build several years ago and the view from the back of their house is still a building site with all the builders rubble/rubbish/machinery permanently on view - it's a total eye sore and sounds like it may remain like that for some considerable time yet.

halfone

shortchanged wrote: »

I've never thought of an older house as being described as second hand. :rotfl:

Neither had I...until I looked at a newbuild development. When I explained I'd been viewing other houses the lady representing the building company looked appalled and said "you mean second hand???" She also described them as "used" - I had to stop myself from laughing out loud



peachie1509 - kingstreet's parallel with new cars seems a good one. I think you have to ask yourself if the idea of living in a shiny new place is enough to compensate for the possibility of losing money when you sell.

pinkteapot

How long do you plan to live there?

I would only buy a new build if it was something I saw as likely to be my long term family home ("forever home" as Phil and Kirsty would say). They do fall in value over the first few years but over the long term it isn't such an issue. My parents-in-law built a new-build in 1980 and are still in it. I suspect the initial drop in value is nothing compared to inflation and the price increase in that time.

If you're looking at a flat as a five-year home, buy "second hand".

In my area a new-build four-bed town house with on-street parking is the same price as a 1990 built four-bed detached with decent sized plot, garage and drive. I know what I'd go for.

tleefox

I'm going to go against the majority on this one - I'm not saying "no" but more "it depends."

House builder's sales teams are always huge pressure to sell properties quickly, and normally a large developer's properties will come with a premium attached. BUT, because after a certain period of time the sales team come under pressure to sell, very often they will slash their prices to shift stock, which is all a question of timing.

I know this to be true as I work in construction as a project manager and have friends who work for house builders as PM's - if you get in at the right time they will sell properties to buyers at their cost price. They make so much money elsewhere that this is not a big issue to them on a small number of properties.