Old vs New property

jumperabv3

What's your opinion about old vs new property?
Would you say a new property is worth much more because of building standards and other features, or the price shouldn't change much between the two?

Say there is House A on some hypothetical London Road worth 300k in some city, it was built 5 years ago ... and next to it there is another house (House built around 1990, they have the same size, same bedrooms, same concept - just one is from 2015 and the other is from 1990 - would you say House B is worth 275k because of its conditions? How would you value an old property basically?

AdrianC

Simple - by comparison to everything else around it. Sure, you may need to adjust a little for one being bigger or better located or having a bigger garden or needing a new kitchen or having been decorated by a colour-blind lunatic. But EVERY SINGLE property in the country has a whole raft of comparables.

New-builds usually fetch a premium, because of the warranty and the "Nobody's ever lived here before" shiny-shiny. 5yrs old has lost that. It's not new. It's just a house like one build in 1990, 1970, 1900...

If house A and house B are absolutely identical bar one having been built earlier, then there's no way there'd be a 10% price difference. But... they won't be identical. You just have to figure out whether the differences are important to you.

RelievedSheff

A house built in 2015 will have been built to different standards to a house built in 1990. It will be far more energy efficient, even from 2015 to present day build standards have changed in terms of energy efficiency.

The only way to value a property is to compare it to what other similar properties have sold for in the area. This is difficult in some areas where there have been very few sales.

As has already been alluded too, no two properties are the same. A house is worth what someone is willing to pay for it.

jumperabv3

AdrianC said:

Simple - by comparison to everything else around it. Sure, you may need to adjust a little for one being bigger or better located or having a bigger garden or needing a new kitchen or having been decorated by a colour-blind lunatic. But EVERY SINGLE property in the country has a whole raft of comparables.

New-builds usually fetch a premium, because of the warranty and the "Nobody's ever lived here before" shiny-shiny. 5yrs old has lost that. It's not new. It's just a house like one build in 1990, 1970, 1900...

If house A and house B are absolutely identical bar one having been built earlier, then there's no way there'd be a 10% price difference. But... they won't be identical. You just have to figure out whether the differences are important to you.

Very interesting, thanks for sharing this.

jumperabv3

RelievedSheff said:

A house built in 2015 will have been built to different standards to a house built in 1990. It will be far more energy efficient, even from 2015 to present day build standards have changed in terms of energy efficiency.

The only way to value a property is to compare it to what other similar properties have sold for in the area. This is difficult in some areas where there have been very few sales.

As has already been alluded too, no two properties are the same. A house is worth what someone is willing to pay for it.

What's so special about the energy efficiency? I had an electrician visit a property built in 1990 - its EPC potential can be A (the top), it requires an investment of 2-3k but once it's done you would save lots of energy.
Is it important only because of the electricity bill that you would be getting whilst living in the property?

fred246

Brand new houses are sold by experts in marketing and they are experts in negotiations. If you have bought off plan you are often shocked by having to pay for turf, fences, aerials etc that you expected. You then have lots of snags. Once they are sorted you should have years of very cheap living. Low fuel bills and zero maintenance. Older houses have much more maintenance and bigger fuel bills. So the price reflects that. That's why you can pick up a 300 year old French chateau cheaply. The cost of maintenance is astronomical.

davidmcn

jumperabv3 said:

RelievedSheff said:

A house built in 2015 will have been built to different standards to a house built in 1990. It will be far more energy efficient, even from 2015 to present day build standards have changed in terms of energy efficiency.

The only way to value a property is to compare it to what other similar properties have sold for in the area. This is difficult in some areas where there have been very few sales.

As has already been alluded too, no two properties are the same. A house is worth what someone is willing to pay for it.

What's so special about the energy efficiency?

Nothing's particularly special about it, it's just one difference which will be more or less important to some buyers.

Ditzy_Mitzy

One must consider the fact that older builds tend to be of better quality than new ones.  That doesn't hold true everywhere, as there are good new builds and shocking seventies exec places, but it's a reasonable rule to stick to.  It's also wise to think about where the house actually is, in the geographical sense.  Where I live all the prime building land, that which is stable and not on flood plains, has already been built on.  As a result the new builds are going on land which is very much second best, such as on top of old sand and gravel workings or in areas prone to flooding.  As a result, the new builds there have issues with subsidence and so on. 

AdrianC

Ditzy_Mitzy said:

One must consider the fact that older builds tend to be of better quality than new ones.  That doesn't hold true everywhere, as there are good new builds and shocking seventies exec places, but it's a reasonable rule to stick to. 

Older properties tend to have had construction defects corrected over the decades - or have been knocked down if they were really bad...

princeofpounds

I agree with the posters above - there's little difference in the value of the structure as there is no newbuild premium now - but there is one further difference that might apply, which is the condition of the key rooms in the house - the kitchen and bathrooms.

There's a good chance that anyone moving into the 1990 property would want to replace those rooms if it hasn't been done already. They might be more satisfied with what's in the 2015 property. That won't apply to every buyer, but you could do a guesstimate along these lines:

Price of new kitchen plus bathroom ~30k. 5 years of depreciation might halve that value, so let's say 15k. You could try listing with that kind of premium, but perhaps only half of buyers care, so you'd probably take an offer that's 7k different. 

That's obviously very very crude, and please adapt the model or put your own estimates in, but it's just to point out there will be a little bit of value in a newer kitchen and bathroom.

The other rooms decorative condition doesn't matter nearly as much - makes it more saleable but no-one is going to value it. 

cattie

Very often an older house will have a higher price if it has all or many of it's original features, which are quite sought after by a lot of people. On the whole new build properties lack the character that a period property will have & people tend to be happier to pay a bit more for this reason.