New house with help to buy or renovate old house?

RelievedSheff

GDB2222 said:

Supersunnygirl said:

GDB2222 said:

The thing is that the new build actually goes down in value relative to other houses. That’s for two reasons. One is that it won’t be brand new when you sell it. The second is that there won’t be an HTB mortgage available when you sell on. That loss is typically estimated as 10%, so that means roughly £20k. 

Can you explain this a little more ? The houses are well priced for the area generally. I checked the house market and it's pretty on point for market value. 

It's like buying a new car. The moment you drive it away from the garage it's a secondhand car, and it's worth less than you paid.

There's a premium for new-build houses that evaporates pretty quickly after you move in. People really do pay more for brand new houses, and that extra is often estimated at 10%. So, if you pay £215k for a new build, you'll struggle to sell it a few months later for £200k, let alone what you paid for it. After all, your buyers would have to accept your choice of colour scheme, and your by then secondhand carpets, and also they won't be able to use HTB, so they'll need the full 10-15% deposit. 

Of course, you won't be selling so quickly, and in say 5 years time house prices may have risen. If prices are up say 10%, you would probably be looking to sell your by then secondhand house for about what you paid for it.  If prices are up say 30% generally, your house will (all other things being equal) only be up around 20%. 

While a lot of what you have said is true it does very much depend on the new build development as well.

We bought on a larger development last year. The price of the new builds has gradually increased over the last 18 months such that it has propped up the price of the houses previously bought. A few houses have resold on the development and all have sold for more than their initial purchase price when brand new.