New Builds

TJMD

I have heard that new builds are more expensive than a second hand house. I am just wondering if this is by a set percentage above current market price or whether the house builders set whatever price they wish.

My partner and I have just reserved our first home (new build) in the West Midlands and are in the process of exchanging contracts. The asking price for was £149,950, but we got a 5% discount and managed to wangle some free fencing and turf and stamp duty paid. Having put down a £30k deposit the remaining mortgage seems affordable.

I guess my main question is whether it is a bad idea to buy a new build?

I know that a lot of people would say now is not the time to buy, but we do need somewhere to live.

Squidgy

I think a new build is best. Personally I would always buy new if I could afford it. Not for the price, because I feel that the prices are usually similar to other houses in the same area in a similar condition (did that make sense?!), but because of the other benefits such as everything is new and in good condition and the house will usually have some kind of warranty incase anything breaks in the first year. There is always someone to shout at if things break!

HTH
Squidgy x

kamaran

New builds are like a new car, there is usually a price premium but you are getting piece of mind. For investment (buy to let) they are usually not as strong Return on Investment but for living in they always very attractive to First Time Buyers.

Hunnymonster

TJMD wrote:

I guess my main question is whether it is a bad isea to buy a new build?

I know that a lot of people would say now is not the time to buy, but we do need somewhere to live.

Ask yourself 2 questions:

Do you like the house ?

Can you afford it if interest rates double ?

Whether it's worth it or not boils down to what value you place on your house - is it a home or an investment vehicle ?

(You'll find total polar opposite views on here, but opinions are like bums, everyone has one )

bunking_off

The evidence around here (NW) is that there is a small premium for a newbuild, but it is small (sub 5%) - certainly not the type of hit you take when you drive a new car off the forecourt. It's impossible to say exactly what the premium is....there are like-for-like comparisons that can be done around here but the differential is swamped by the "location location location" factor (ie is the differential because it's new, or because of where it is?)

In terms of new versus nearly-new, there are pros/cons either way. The big upsides of a new build are that you get the full 10yr warranty, everything is brand new, you have the feeling that this is your house/not someone else's taste and you can choose some of the decor/fittings. On the downside, you've got to deal with snagging (and at 30 months since moving in I'm still dealing with some issues!), you've got the hurldle of transforming from magnolia heaven, and in the majority of cases you'll be living in a building site for a while. If you want to make lots of new friends who'll do foreigners for you (building, plumbing, painting), get a newbuild....you won't be lonely.

Having gone through buying a new build, I can see a lot of attractions of buying a property approx 20 months old - snags mainly ironed out, settlement has finished so no new cracks, still under builder's warranty until month 24 so any last minute issues can still be resolved.

John_M_Business

I would just be a little careful with new builds and the comments so far... here are some thoughts:
- New builds are only new builds for the first few years and then they don't look so new any more. Don't trust anyone who tells you that they should be worth significantly MORE than similar sized properties in the same area. It is likely that after, say, ten years they won't.
- This is particularly true if they don't have any features that set them apart (i.e. if they're just brick blocks and boxy rooms). Most people are looking for accommodation that has some individual qualities to it - call it character if you will
- The warranty is great IF you have a builder who really will deliver on it, on time! Check out first who the builder is: if it's an individual the warranty may not be worth the paper it's written on. If it's a business, do a little background research on the firm - some are great, some are cowboys.
- The first people in always have problems with snagging issues. It's not necessarily because the builder is bad, but that they have to rely on so many different workmen and suppliers. Don't be disappointed about this, persevere!!
- Check the walls! New builds are notorious for paper-thin non-insulated walls. These are a waste of time. You can hear everyone's conversation (including next door) and never get any peace

Once you're confident that all these conditions are satisfied, then go ahead - I'm sure you'll be glad that everything is new, fresh, clean and modern!

TJMD

Hunnymonster wrote:

Ask yourself 2 questions:

Do you like the house ? - Yes

Can you afford it if interest rates double ? - I think so, would have to live with less of life's luxuries. Besides as some people are predicting the UK housing market to go the way of Japan's maybe we will get negative interest rates too?! :eek: (not seriously believing this!)

Whether it's worth it or not boils down to what value you place on your house - is it a home or an investment vehicle ?

(You'll find total polar opposite views on here, but opinions are like bums, everyone has one )

A house to me is a home and a longer term investment. Let's hope it all works out OK.

TJMD

Thanks for all the opinions!

bunking_off

Just a couple of comments to John's;

John_M_Business wrote:

- This is particularly true if they don't have any features that set them apart (i.e. if they're just brick blocks and boxy rooms). Most people are looking for accommodation that has some individual qualities to it - call it character if you will!

I'm not convinced everyone is after period features. Channel 4 would have you believe that, but there's a big market out there who value the convenience of things like en-suites, energy efficiency and limited maintenance requirements. I don't think a newer home will ever have a price premium over a period property of similar dimensions, but it would be equally incorrect to suggest that period properties always command a premium as well.

John_M_Business wrote:

- The warranty is great IF you have a builder who really will deliver on it, on time! Check out first who the builder is: if it's an individual the warranty may not be worth the paper it's written on.

Agree totally, particularly for smaller builders. However all the "nationals" use NHBC beyond year 2. It's by no means perfect, but it is what it is and there'll be no differential between builders.

John_M_Business wrote:

- Check the walls! New builds are notorious for paper-thin non-insulated walls. These are a waste of time. You can hear everyone's conversation (including next door) and never get any peace

Agree but again things are not always that way. For example, in my house every single wall is supporting, with the consequence that there aren't any "plasterboard partition" walls - everything's blockwork. I would, however, add that a couple of major failings of every newbuild I've seen are;

- walls are dry-lined (plasterboard mounted on studs then skimmed over). This makes it a real pain putting anything on walls as you either need special fixings (for lightweight stuff) or long screws to get to the blockwork behind.
- upstairs floors are inherently creaky

TJMD

I must admit with me being 22 and my partner 23, period features do not matter to us a great deal!

The developer we are buying from is Bloor Homes and they are covered by Zurich as opposed to the normal NHBC warranty.

Funnily enough, I haven't checked out the walls yet. This is what I will look into before signing in the dotted line! The one thing I always check in properties is water pressure. I hate feeble showers!

bunking_off

Think you'll probably find the water is almost certainly direct mains fed.

Advantages : good pressure, great showers, no space wasted with cold water tank. Disadvantage : if there's a water cut for any reason (e.g. burst main down the road), you've got no stocks to fall back on.