New build - Market downturn risk?

HanPop

Not all of us have bought vastly overpriced new builds, we got a very good deal on ours and I know this by looking at comparable properties in the area that ours is already worth a fair bit more than we paid less than a year ago. 

However I am aware that lots of new builds are very expensive for what they are and that is why when buying a new build you have to shop around and see what similar older houses are going for.

rik111

I bought a second hand new build that was 5 years old. Originally purchased in 2007 for £250,000. Purchased by me  in 2012 for £194,000 + original owners had done a lot of work including spending 10k to get garden landscaped. That is how much you can lose on anew build in a declining market. Next door (identical house) sold for £310,000 last year so you can see now it is worth well above the new build price......

Crashy_Time

rik111 said:

I bought a second hand new build that was 5 years old. Originally purchased in 2007 for £250,000. Purchased by me  in 2012 for £194,000 + original owners had done a lot of work including spending 10k to get garden landscaped. That is how much you can lose on anew build in a declining market. Next door (identical house) sold for £310,000 last year so you can see now it is worth well above the new build price......

But we are back into a declining market......

RelievedSheff

Crashy_Time said:

RelievedSheff said:

Hannimal said:

Also don't listen to Crashy...

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

We were told that the price of our new build would drop when we bought it. We have just gone through the remortgage application after 2 years in the property and our new lenders surveyor has valued it at 10% over what we paid for it 2 years ago. 

What really counts though is what a buyers lender values it at?

Not really given that we are not selling it!!

RelievedSheff

davidmcn said:

AdrianC said:

RelievedSheff said:

Hannimal said:

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

We were told that the price of our new build would drop when we bought it. We have just gone through the remortgage application after 2 years in the property and our new lenders surveyor has valued it at 10% over what we paid for it 2 years ago. 

Obvs, some new-builds will appreciate in value.

But, as a rule of thumb, it's fairly obvious that they won't. Just think about it...
Brand spankin' - vs - lived in for several years.
10yr warranty - vs - remaining balance of warranty.
Choose spec - vs - somebody else's spec.
HtB - vs - no HtB.

That's why new-builds lose value.

Even worse if the builders are still there flogging shiny new ones round the corner from yours.

That is in part why the prices of the two year old new builds have risen here. The developers have increased their prices on the new new builds in the newer phases which has dragged up the values of the existing houses.

There have been a few couple of years old houses resold on the estate and they have all achieved more than they were originally purchased from the developers for.

RelievedSheff

Crashy_Time said:

rik111 said:

I bought a second hand new build that was 5 years old. Originally purchased in 2007 for £250,000. Purchased by me  in 2012 for £194,000 + original owners had done a lot of work including spending 10k to get garden landscaped. That is how much you can lose on anew build in a declining market. Next door (identical house) sold for £310,000 last year so you can see now it is worth well above the new build price......

But we are back into a declining market......

Are we really?

UnderOffer

RelievedSheff said:

Hannimal said:

Also don't listen to Crashy...

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

We were told that the price of our new build would drop when we bought it. We have just gone through the remortgage application after 2 years in the property and our new lenders surveyor has valued it at 10% over what we paid for it 2 years ago. 

But didn’t you buy the last house on a new build site greatly reduced, as they were desperate to sell? What did your neighbours pay who reserved early, for the same style house as yours and how does that compare to the 10% increase of the value you’ve received? Are you now priced at the value your neighbours paid or perhaps below? 

RelievedSheff

UnderOffer said:

RelievedSheff said:

Hannimal said:

Also don't listen to Crashy...

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

We were told that the price of our new build would drop when we bought it. We have just gone through the remortgage application after 2 years in the property and our new lenders surveyor has valued it at 10% over what we paid for it 2 years ago. 

But didn’t you buy the last house on a new build site greatly reduced, as they were desperate to sell? What did your neighbours pay who reserved early, for the same style house as yours and how does that compare to the 10% increase of the value you’ve received? Are you now priced at the value your neighbours paid or perhaps below? 

We did get a very good deal on our plot to be fair.

Similar plots of the same house type were sold for £225k, £230k and £235k where as we paid £210k for ours. Ours has just been valued at £235k for the lenders purposes. So it does put it at the same price as the highest purchase priced plot but higher than the other two.

It is all somewhat irrelevant mind you as the house is not going for sale

UnderOffer

RelievedSheff said:

UnderOffer said:

RelievedSheff said:

Hannimal said:

Also don't listen to Crashy...

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

We were told that the price of our new build would drop when we bought it. We have just gone through the remortgage application after 2 years in the property and our new lenders surveyor has valued it at 10% over what we paid for it 2 years ago. 

But didn’t you buy the last house on a new build site greatly reduced, as they were desperate to sell? What did your neighbours pay who reserved early, for the same style house as yours and how does that compare to the 10% increase of the value you’ve received? Are you now priced at the value your neighbours paid or perhaps below? 

We did get a very good deal on our plot to be fair.

Similar plots of the same house type were sold for £225k, £230k and £235k where as we paid £210k for ours. Ours has just been valued at £235k for the lenders purposes. So it does put it at the same price as the highest purchase priced plot but higher than the other two.

It is all somewhat irrelevant mind you as the house is not going for sale

Thank you @RelievedSheff, that’s interesting that you are now after 2 years at the price your neighbours bought at. Of course, I’m aware you are not selling but felt your post was a little misleading. 

RelievedSheff

UnderOffer said:

RelievedSheff said:

UnderOffer said:

RelievedSheff said:

Hannimal said:

Also don't listen to Crashy...

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

We were told that the price of our new build would drop when we bought it. We have just gone through the remortgage application after 2 years in the property and our new lenders surveyor has valued it at 10% over what we paid for it 2 years ago. 

But didn’t you buy the last house on a new build site greatly reduced, as they were desperate to sell? What did your neighbours pay who reserved early, for the same style house as yours and how does that compare to the 10% increase of the value you’ve received? Are you now priced at the value your neighbours paid or perhaps below? 

We did get a very good deal on our plot to be fair.

Similar plots of the same house type were sold for £225k, £230k and £235k where as we paid £210k for ours. Ours has just been valued at £235k for the lenders purposes. So it does put it at the same price as the highest purchase priced plot but higher than the other two.

It is all somewhat irrelevant mind you as the house is not going for sale

Thank you @RelievedSheff, that’s interesting that you are now after 2 years at the price your neighbours bought at. Of course, I’m aware you are not selling but felt your post was a little misleading. 

Assuming the others were valued at a similar price then none of the plots would have lost any money and three of them would have risen in value. There was certainly no intention of being misleading and I apologise if that is how it came across!