If you’re looking to get onto the property ladder, you might have seen that there’s a wide variety of houses to choose from.
One of the options that you may have considered is to buy a new-build home. According to figures from the National House Building Council, developers built more than 120,000 new houses in 2020, despite the disruption of the pandemic.
Many of these properties have a variety of benefits, such as financial buying incentives, but can also come with drawbacks. If you want to know more so that you can make a properly informed decision, here are the pros and cons of buying a new-build home.
Pros of buying a new-build home
There is less work for you to do
One of the main benefits of buying a new home is that there is less work for you to do when you move in. Once the house is ready, you’re usually able to move straight in and start unpacking your things.
New-build properties typically come freshly-painted and with new bathrooms and kitchens. This means that, unlike when you buy an older property, you won’t have to spend time renovating it.
When you buy a home from some property developers, you may even have the option to pay to build “off-plan” and have a greater say in the interior design.
You may get to pay lower energy bills
Since many of the latest building regulations encourage greater energy efficiency, many new-builds have double-glazed windows, as well as insulated roofs and walls.
According to data from the Office for National Statistics, new-build homes in England have a median energy efficiency rating of 84 out of 100. This is significantly higher than the rating for older housing stock, which stands at only 64.
Since new-build houses are more energy-efficient, you may find that you could save money on your monthly bills.
There is no upward chain
Another benefit of buying a new-build home is that unlike with an older house, there isn’t a chain of buyers above you. This can mean that there’s less chance of any disruptions in the buying process.
For example, if the seller in the chain above you was to pull out of their own sale, yours may also be impacted. If you buy a new-build, however, there are no previous owners, giving you one less thing to worry about.
There are financial incentives for first-time buyers
If you’re a first-time buyer, you may be able to get support from the government when buying a new-build property.
In England, you can get financial assistance with the Help to Buy: Equity Loan, which you can use to cover the cost of a mortgage deposit. With this scheme, you can borrow up to 20% of the value of the property, or 40% if you’re hoping to buy one in London.
However, in order to qualify for the loan, the builder of the home must be registered with the Help to Buy scheme. Furthermore, the value of the property must be below the regional price cap. If you want to check what the limit is for your area, visit the government website to find out.
Cons of buying a new-build home
There may be delays if there are issues with construction
One potential problem with buying a new-build property is that construction isn’t always completed according to plan. If there are unexpected problems then it might be delayed, which can be a major disruption for you.
For example, social distancing restrictions during 2020 meant that many developers were forced to slow down construction in order to abide by safety precautions.
If a delay is too long, it may also have financial repercussions. For example, you may have to pay more rent while you wait for your new home to be finished. In a potential worst-case scenario, you could also run the risk of a mortgage offer expiring if the delay is too long. We can help you in this scenario.
There may be less storage space than an older house
Another potential issue with buying a newer property is that they are typically smaller than older ones. This can pose a problem if you have a lot of possessions, as you may find yourself limited on storage space.
According to a 2019 study, the average size of UK homes is smaller than ever before due to many new-builds being more compact. The study shows that houses built in the 2010s were, on average, more than four square metres smaller than those built in the decade before.
This can particularly be a problem if you have children, or plan to, as you’ll probably need a lot of room for all their belongings. If you are planning to start a family in the near future, you may prefer to buy an older home.
You may have to pay the “new-build premium”
A final issue with new-build homes is that property developers often charge a premium for them, which can mean that they cost more than an older house of the same size in the same area. So, if you’re on a tight budget, you may find that many new-build homes are out of your price range.
While newer properties have many benefits, such as those mentioned above, you may have to think carefully about whether they are worth this premium. For example, while a new-build may be more energy-efficient and save you money on your utility bills, it may be several years before you make a real saving.
Get in touch
Buying a property is a major life event and this is particularly true if it’s your first one. If you want to be able to make your purchase with confidence, you may want to seek professional advice.
When you work with a mortgage broker, they can help you to properly weigh up your options, as well as making the home-buying process faster and easier when you find the right one for you.
If you want to know more about how a mortgage broker can help you when buying a house, please get in touch. Email firstname.lastname@example.org or call us on 01832 272653.
Your property may be repossessed if you do not keep up with repayments on your mortgage.