New build homes offer a number of advantages, from a pristine property that no-one has lived in before, to access to developer incentives and home buying schemes.
Let’s take a look at the differences between buying a new-build home and a more traditional one.
You can buy off plan
Many new build homes are sold off plan.
This often means you have the chance to personalise your property, choosing the kitchen units, bathroom suite, tiles, carpets, paint colours and even door handles.
You may also be able to negotiate the price down, particularly if a lot of units are being released at once.
While your home is under construction, developers usually have show homes available for you to view, so that you can get a good idea of the home you’re buying.
But be sure to check the floor plans for your property and the location on site, to get an idea of where light will be coming in.
Buying off plan when house prices are rising can be beneficial, as it means you lock into the price before you complete and benefit from any house price gains in the interim.
That said, with traditional homes, you get the chance to view the property in situ before you buy it.
And when you are buying off-plan, there may be a delay of several months between when you commit to the property and when you can move in, which can make coordinating the sale of your existing home tricky.
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Developer incentives
One of the big draws of buying a brand-new home is that developers often offer incentives.
They can range from paying your stamp duty or giving you cash towards your deposit, potentially saving you thousands of pounds, to free carpets, kitchen appliances and annual travel cards.
If you're buying through a Shared Ownership scheme, incentives may include paying all or part of your rent on the portion of your property that you don't own for a limited time.
But while these incentives may be enticing, it’s important to look at them with a cool head to assess if they are worth it and the home you are buying is the right one for you.
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Simpler property chains
Another advantage of purchasing a new build is that it often means you're in a simpler property chain and in some cases, no chain at all.
Buying from a developer means you only have to worry about the property chain for the home you're selling.
But some developers will even help you with this, offering assistance to sell your home, or even offering to buy your existing property through a part exchange scheme.
While opting for part-exchange reduces the hassle of having to find a buyer yourself, it’s always worth having a valuation done yourself before making a decision on whether to go down this route.
If you decide to sell your current home on the open market, you should also be aware that in some cases, building may fall behind schedule, making it more difficult to coordinate completing on your existing home and your new one.
Help with buying a home
There are a number of schemes to help you get on or trade up the property ladder that are only available if you're buying a new build home.
Shared Ownership is the main one, under which you can buy a portion of your home, usually between 25% and 75%, although it can be as low as 10%, and pay rent on the part you don’t own.
You then have the option to gradually increase your stake in the property, known as staircasing.
Find out more about Shared Ownership
Deposit Unlock is a scheme launched by the house building industry enabling you to purchase a new build home with just a 5% deposit.
The developer then pays a percentage of the purchase price into an insurance policy for your mortgage lender, enabling you to benefit from a lower interest rate than you would normally get on a mortgage if you are borrowing 95% of the property’s value.
Find out more about Deposit Unlock
Another scheme is First Homes, under which local first-time buyers and key workers can purchase a new build home at a discount of between 30% and 50%, although this discount is passed on to the next buyer when you come to sell.
Find out more about First Homes
Lower maintenance costs
One of the big draws of new build properties is that they come with a 10-year warranty which covers any defects, such as a leaking window or problems with pipes, during the first two years, and any structural issues for the first 10 years after you have completed your purchase.
As a result, you shouldn’t have any big maintenance bills to worry about during the first 10 years.
The benefits do not end there, as new builds also come with a new boiler, and typically also brand new appliances in the kitchen.
New build homes are also significantly cheaper to run than their existing counterparts, with new build homeowners typically saving around save £3,000 on gas and electricity bills at the time of writing, compared with those in older homes, due to new properties being more energy efficient.
Cheaper buying costs
Not only are running costs cheaper for a new build home, but the costs associated with buying one are also lower.
You don’t need to pay for a full housing survey, such as a HomeBuyer Report or Building or Structural Survey, as any structural issues with your property will be covered by the 10-year warranty. These surveys typically cost between £400 to £1,500.
That said, it is still a good idea to have a snagging survey done. These usually cost around £300 to £600, and will flag any defects or repairs that need doing, or if something is not compliant with building regulations.
Developer incentives will also sometimes include paying your solicitor’s fees and even your stamp duty, further reducing your buying costs.
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