New Build versus Used House Prices

Birdman2015

I was always led to believe that the price of a new build had something of a premium but is this the case?

I have a reservation for a new build, price of the house is £305,000 There is a 4 year old slightly smaller property in the same development for sale with a home report valuation of £310,000. The builder is selling these new at £285,000.

Surely the jump from 285K to 310K is not just down to carpets, curtains etc and the garden being established is it? I can't think why there would be such a difference from new to used price.

Marvel1

I can only think the used price is the seller trying to make a profit, I agree the price is weird as I always believed the new price higher as the builder needs to profit.

When you same development, I assume same location, so again weird, unless I am missing something also.

lisa110rry

Interestingly, I have always believed the opposite - that "used" house prices were generally higher than new build as the area looks more settled. In fact I think I was told that or read it somewhere long, long ago...I used to work in Estate Agency in the late 70s - early 80s.

Birdman2015

When I say the same development, it is the first phase of a large estate the older house is in, exactly same house type as the new ones.

The actual valuation on the home report for the older house is correct as other similar houses have sold on that estate at the same price.

At least it makes my purchase of the larger house seem like a better deal!

fashionvictim

Birdman2015 wrote: »

When I say the same development, it is the first phase of a large estate the older house is in, exactly same house type as the new ones.

I'm buying on new build development that started few years ago... I believe it will continue for another 2 years after we move there.

I have seen a exactly the same 2 year old house as I am buying for sale at same price as we are buying it NEW for.

Looking online it seems they paid about 90K less for it two years ago. It is under offer now, but of course I don't know if they got asking price on their sale.

Now there is another one very similar up for sale, but with a conservatory in addition. It is also 2 years old up for sale for 30K more than my new one. I can't work out which one it is to find the exactly price in 2013, but looks like they are making at least 100K in 2 years if they sell at the that looking at the road prices.

It's supply and demand I guess. I am moving further out from London like a lot of people as I cannot afford a house here. There is still a lot of demand on the development.

I personally would prefer not to live on a live development buying new or second-hand, but it's a compromise .

I was told the reason mortgage companies prefer larger deposits on new builds is that they are sold at a premium and go down in value before they might come up again.

I suppose it easy to drop your house price, so why not try for a higher price.

My personal feeling is a very modest family house is vastly over priced in my local area - most average earning would not be able to have afford a family at those prices.

I showed my dad a house around the corner from where I live now which is a million pound tiny 3 bed semi... honestly it's ok, but for a million you sort of think you'd be getting a mansion..not in Surrey.

eddddy

lisa110rry wrote: »

Interestingly, I have always believed the opposite - that "used" house prices were generally higher than new build as the area looks more settled. In fact I think I was told that or read it somewhere long, long ago...I used to work in Estate Agency in the late 70s - early 80s.

I think this is probably due to a cyclic phenomenon that especially affects people who work in estate agents.

- When an EA is marketing a 'used' house, 'used' houses are generally more desirable and worthy of a higher asking price.

- When an EA is marketing a new house, new houses are generally more desirable and worthy of a higher asking price.


The situation can sometimes change on a day-to-day basis, or even an hour-to-hour basis.

I think it depends very heavily on the specific house that the EA is talking about at that particular moment.

Mickygg

It varies.
New builds in a great area being resold will command a good price.
Oversupply of new builds will cause new build resells to command a lower price.
I sold my new build after owned for a few years and didn't notice any premium loss as I sold in line with general market increase.
I also know that a new development still building, a friend of mine bought and sold again in 1 year and sold for the same as the new ones are selling for! People liked the view better apparently.

Birdman2015

Mickygg wrote: »

It varies.
New builds in a great area being resold will command a good price.
Oversupply of new builds will cause new build resells to command a lower price..

The resell I refer to is in a good area, the builders houses are usually much in demand, whether this accounts for a £25K increase on new price I don't know.

TBeckett100

One development I looked at were selling 4 beds at 410k. Someone is selling their 1 year old house and have had to drop to 350k, so unless you choose wisely you can lose.

The village isn't particularly great, local school needs improvement and the shared ownership percentage is higher than usual so I suspect a combination of all three has led to a fall.

It did dawn on me that having a large new build comes with a major problem, replacing 4 bathrooms and a kitchen