New builds

tbo127

When looking at new builds, is there a good way of determining how much the price is inflated by?  I appreciate all
new builds come with a premium but is there a way you can find out how much of a premium? 

Are new builds in new estates also more likely to retain its value once the entire estate is complete? Compared to new builds on existing residential areas? 

JamoLew

I would say that it could be as much as 10-15%

However - some "bargains" can be had right at the start of a development when they are trying to attract buyers and right at the end when they are trying to get shut of the last few properties

You are paying the premium for new as opposed to second (or more) hand - plus:

The convenience of having zero "work" to do to make it habitable

The option to add extras and choose fittings and fixtures, bathrooms, kitchens etc etc

No onward chain

AdrianC

tbo127 said:

When looking at new builds, is there a good way of determining how much the price is inflated by?  I appreciate all new builds come with a premium but is there a way you can find out how much of a premium? 

Simple.

Look at the prices similar non-new-builds in the same area are selling for.

RelievedSheff

We bought a new build a couple of years ago. The development was about a third complete at that time.

The price was comparable to similar existing houses on surrounding estates. There wasn't much of a premium perhaps 5% tops.

Prices have significantly increased here. The new builds on the new phase of development are now significantly higher than when we bought for the same house type.

Apodemus

It is quite an eye-opener if you look on Zoopla (or similar) at the initial sale prices on recently completed estates.  The variation in prices for identical properties suggests that buyers should perhaps be ready to drive a hard bargain.

benson1980

In our area (Hampshire) our new build estate in our village was built around 2016-2018. These houses that sold in 2017/2018 are selling for around the same price (in some cases a little less) now set against a general backdrop of increases of around 10% in our area. In comparison the non estate houses that were purchased in the same price bracket back then (say around 500k) are selling for 50 or even up to 100k more. 

If you are concerned with house value/looking to move up the chain in a few years, buying a new build is rarely a good move. 

niceguyed

As much as the developer can get away with! Help to buy has certainly inflated new build prices. I can only tell you what I know locally in Derbyshire but the 4 bed detached we've been looking for, the new build equivalents seem to be a 25% premium. That's asking price of course, but I have scratched my head at how the heck people have got mortgages on them. They all seem a complete rip off compared to older more generously sized properties (with a decent garden).  

benson1980

In relation to part b of the OPs question, I'd say more-so the other way around. New builds in established residential areas can potentially represent reasonable value for money if the plot acquired is decent. These types of new build definitely seem to retain/increase in value better around our way. On larger estates, once it's fully built then the problems such as limited parking + narrow roads/crammed plots become a bit more obvious. Roads can become cut throughs and because the frontages are so small the cars will literally be driving a few metres from your living room.

I really cannot see the appeal but plenty of people buy them. Help to buy is a massive factor obviously. 

tbo127

Thanks for all the tips.

Do people have any experience with resales of recent new builds?  They also seem to be fairly inflated.  

benson1980

tbo127 said:

Thanks for all the tips.

Do people have any experience with resales of recent new builds?  They also seem to be fairly inflated.  

Yes- checking sold prices in our location for the last few years as we've made three house purchases in this time, with value for money and potential to make money being our main priorities to get up the ladder. Quite a few new builds sell at a loss whilst non estate houses that have been resold in the same period increase far more. You may be referring to asking prices, I presume?