New build - Do I, Dont I

DavyNix

Hi Guys,

Single dad (34) with 3 kids.. have been looking at 3 beds (not ideal) as they just fall into price range after separating from Ex and renting for 2 years.

However, A 4 bed new build has become available which i can afford to buy using the help to buy scheme.

My question is, i'm desperately trying to work out where this will leave me 6 - 10 years time. I know none of us can predict the future but are there any hard and fast facts that i could consider... for example.. do new builds lose money straight after purchase? If so what sort of percentage am I looking at?

Just trying to gather as many facts together as possible - i'm not really comfortable with the help to buy scheme and it's top end of budget still so I have to be sure! I also don't want to get 10 years down the road only to find that i haven't gained in equity.

Any advice appreciated.

Many Thanks - David.

Pixie5740

New builds do tend to lose value after they've been bought as they are no longer new. I couldn't give you % value as it depends what the housing market is like in the local area. In some high demand areas new builds might actually increase in value rather than dropping.

If your mortgage is a repayment mortgage then you should build up some equity in your property in the first 10 years providing that house prices don't nose dive...which they could...nobody knows.

Lord_Baltimore

New builds supposedly lose value after purchase but that's not been my experience. Location comes into it. Properties built in the right place will always be hot.

Besides, any money 'lost' on a new build would be far exceeded by the upkeep of an older place. All sorts of tradesmen rub their hands with glee when they get into an older house.

You however will save on bills, have a guarantee and a nice new, efficient, modern place for your kids. What's not to like?

cloo

I think if it's in a decent location, eg not some backwater with no infrastructure, it should hold value fine. I imagine they might lose a little for not being brand new, but it'll be gained over time. This sounds like a long term family home, so I'd not worry to much about it if you're likely to be there for some time.

densol_2

I'm on my 4th new build ( from brand new ) only bought one second hand house ( 1930's) and hated it - haven't really noticed a drop in prices on any of my houses - but the lack of maintenance is 1000% worth it

marlot

As a rule of thumb, expect a new build to be about 10% more expensive. But you get new appliances, windows, better insulation etc.

I'm just about to buy my second new build. Where I'm buying there isn't much choice used, and those that are there need a fair amount spend on them.

dimbo61

Another one agreeing about New build and saving money

DavyNix

marlot wrote: »

As a rule of thumb, expect a new build to be about 10% more expensive. But you get new appliances, windows, better insulation etc.

I'm just about to buy my second new build. Where I'm buying there isn't much choice used, and those that are there need a fair amount spend on them.

Thanks so much for the replies, great forum.

The slightly higher price has been playing on my mind but if this is the norm then fine...and of course the fact that it's ready to move into and will be maintenance free are all very good points.

Could I ask if there are any usual areas which I can push for them for a little extra help - Maybe window blinds or flooring? In this build the kitchen comes completely fitted but flooring is left to me along with the garden (which is just top soiled).

Thanks again...

Mortgage_Mark_2

I'm not sure they 'lose' money so much as they don't increase in price at the same sort of ratio as older properties.

Add in the fact that the vast majority of new builds have comparatively small gardens and room sizes and that's the main reason people don't like new build, rather than the price, in my experience.

ReadingTim

I'd be more worried about whether you could afford the larger place when interests rates start going up over the next year or two, rather than what price you might get for the place in 6 to 10 years - one's crystal ball gazing, the other's more certain.

To what extent is the larger place top of budget now, or top of budget when rates several percent higher?

dimbo61

Yes look at 5 year fixes for security if you are paying at the top of your budget