Are New builds an ideal way onto the property ladder for a 1st time buyer?

lizzay

Hi all,

It’s my first time posting, so I'm hoping to get some helpful advice , I just wanted to know if buying into new builds is a good idea? I am a 23yr old recent graduate, with no responsibilities (bar student loan); and have always dreamed of owning a property since I can remember; and I am currently looking at the attractive prospects of new builds.

My ideal plans regarding property would be to buy into a new build in London to which I would like to live in for a few years and then rent it out, I have done some reading into whether or not I could rent out a place and the answer has been yes once the loan has been paid (though I may need to double check that).

Many developers are offering attractive deals to encourage first time buyers such as securing deposits, paying stamp duty etc. I am in my first job and feel that I am at the beginning of my “life” so hopefully while paying off a mortgage now may be a little difficult I can only move up career wise (God willing I don’t fall of the wagon).

Does anyone think it wise to buy a new build or just wait until I can afford to by a property in the future which seems like 10years away?

Any advice is welcomed as I am trying to get a wider perspective on this before applying to the bank of mum and dad

Thomas_Hardy

They are offering attractive deals because the properties are massively overpriced. From one that has been there, don't do it

lizzay

Thanks my hesitation has been the fact that they sound a little too good to be true but at the same time one of the only ways of getting a property without a massive deposit *sigh*

bclark

Don't be put off by one poster on here. New builds get a rough time on here but I think that while many are overpriced there are also some bargains to be had.

In my recent house search I came to the conclusion that in my area the new build properties were far better value than half the second hand homes coming onto the market.

I would say just be very careful about which actual development you buy on. Make sure its going to all be finished and that the facilities promised etc will be coming. If you are happy with the property and the area then go for it.

HappyMJ

New build properties depreciate much faster than older properties. However, the amount you then need to spend on maintenance is reduced to virtually nothing.

If you ae buying a new build property to eventually rent out then you would be better off not paying the mortgage any faster than the maximum loan term. If 30 years is an option then take that. You can then claim the interest on the mortgage as a expense against the income you get from the rent when you do eventually rent it out. Save the excess money somewhere else so you have a much bigger deposit for your second house....then pay the excess income off the house that you are living in....it'll save tax.

and....negotiate the price and inclusive things...such as free carpet, landscaping, etc...

lizzay

Thanks I really appreciate the advise guys

geoffky

These schemes rely on mugs who have no understanding of the housing market..

YoungBusinessman

Personally looked into all this before purchasing late last year. I'm 21 for what it's worth. No value what so ever in a new build, it is like a new car. Soon as its off the forecourt it depreciates only difference is eventually a flat value will steady out, won't go down to scrap value. Ended up buying a 1970s 2 bed for £112,000, that required work(upto scratch ones in area been sold for £125,000-£130,000) The new build 2 beds(which were a bit smaller) were £170,000, with a smaller deposit required the payments were £300 a month more over the 20 year term.

This is only my situation, just thought I'd share and suggest you consider this before going in with ros! tinted "I own a property" glasses.

suze200

Are New builds an ideal way onto the property ladder for a 1st time buyer?

Nope. YBM is spot on with the new car analogy.

Thomas_Hardy

HappyMJ wrote: »

New build properties depreciate much faster than older properties. However, the amount you then need to spend on maintenance is reduced to virtually nothing.

If you ae buying a new build property to eventually rent out then you would be better off not paying the mortgage any faster than the maximum loan term. If 30 years is an option then take that. You can then claim the interest on the mortgage as a expense against the income you get from the rent when you do eventually rent it out. Save the excess money somewhere else so you have a much bigger deposit for your second house....then pay the excess income off the house that you are living in....it'll save tax.

and....negotiate the price and inclusive things...such as free carpet, landscaping, etc...

I disagree on the maintenance issue. In theory, a new build should be perfect, and if it's not you will have an NHBC/ Zurich guarantee to fall back on. In practice you can have a snagging list several pages long and an insurer that keeps passing you back to the builder. It took me three years to sort out the major faults and seven years on we are still discovering problems. The builders have recently been back because they had failed to complete the fire/ party wall!

Nothing is free, and if they tell you included extras are worth £5,000, you would be able to do it yourself for half that. Plus, if the property is such an attractive offering, why do they need to offer extras?

geoffky wrote: »

These schemes rely on mugs who have no understanding of the housing market..

Yes, I would wholly agree. I was desperate to move and saw a property that was ready to move into and (I thought) would be hassle free. I was very naive

l0u1se

I'm also interested in finding a bit more about this, I live in Wales roughly 15 miles away from Cardiff etc, a lot of the properties around here are old properties, an older 2 or 3 bed terrace house costs approx £100,000, the new builds, Barrett style homes and such are around £120,000.

"Old" 2 bed flats approx £70,000, new build £90,000.

With the housing market as it is, when we are talking of the area, and not much difference in price, what is the likelihood of the new builds depreciating in value dramatically?

It is probably very naive of me , but paying an extra 20k to get a new property and the benefits e.g stamp duty, new kitchen already in, new bathroom, it just seems so more of an attractive offer?

Edit; I know nothing about purchasing properties, housing market etc, but need to learn so please be kind