When it comes to buying a new home, the decision of whether you want a new build or an older property will be one of the first things you think about.
We wanted to look at the pros and cons of purchasing a new build home, and what the advantages and disadvantages are of buying an old house.
The government is trying to tackle the shortage of homes, with a big focus on building new homes. They are also adding several incentives to encourage more people to buy new homes, with schemes such as Help to Buy and Shared Ownership.
Advantages of a new build
So why buy new? What is it about a brand new home that is so appealing? From first-time buyers to retirees, downsizers to growing families, there are many reasons for purchasing a new build.
Chain free
When you are buying a new home straight from the housebuilder, there are no onward chains to worry about. Some housebuilders even have Part Exchange offers, so you don’t have to worry about problems with selling your current home.
Incentives
Many new build properties can be bought using government schemes, such as Help to Buy and Shared Ownership, both of which are designed to help first-time buyers get on the property ladder. Some developers also have offers such as paying the stamp duty
10 year warranty
All new homes in the UK are covered by a 10 year home warranty and insurance guarantee. The warranty protection provides a very comprehensive cover against a range of potential problems, including any issues with the construction of the home itself. The warranty is free to the homebuyer - the housebuilder takes out the warranty.
Blank canvas
The idea of moving into a home that is entirely new is very appealing to many people. If you are purchasing off-plan, some housebuilders will give you the opportunity to choose your own fittings and furnishings to personalise your new home. A new build property gives you the chance to put your own stamp on your home, and you won’t need to worry about renovations.
Energy efficient
The high standard of new build homes, and the good insulation means that new build homes are much more energy efficient than old properties, which tend to be draughty and cost more to heat.
Disadvantages of a new build
Delays
Mortgage offers tend to be valid for six months, but if there is a hold up or a problem with the construction of your home then your offer could expire. Lenders will still lend if you are looking to purchase off plan, but if there is a delay then there will generally need to be a reassessment, and if your circumstances have changed then the lender may not extend the mortgage offer.
Character
Some people feel that new builds lack character, or think that they all look the same.
Less space
New build homes tend to make the most of the space available, and if your property has a garden, it will usually be smaller than period homes.
Snagging
Before you complete on your new home, you’ll need to do a snagging check on your new home. Snagging your new home means to check for any problems or defects with the build, so the housebuilder can correct these, ideally before you move in. While no-one wants to have to deal with problems in their new home, snagging your new home before you move in, you could save you a lot of money in the long run and avoid a lot of potential problems.
Usually any faults are just small defects that can quickly be corrected before you move in, but it is a good idea to complete a snag list to ensure there are no big problems.
Service charge
The service charge can vary depending on the location of your new build home, but the service charge and ground rent on a new build home tends to be considerably higher than that of older properties.
Advantages of an older home
Character
Older properties have had the time to develop an identity, but you can still put your own stamp on the home. Craftsmanship and individuality are hugely appealing, and the character of an older home can be what makes it so unique. The history of home can also be a huge selling factor, and there can be a real sense of community in the neighbourhood if homeowners have been there for years, rather than a brand new development where everyone is new.
Negotiating
Often the purchase price of an older property is negotiable between the buyer and the seller, with several factors such as the property condition, the survey and the speed with which the current owners want to move, coming into play.
More space
Typically, older homes have more space and storage, which is especially appealing for growing families.
Disadvantages of an older home
Chains and gazumping
You will often find yourself in a chain when buying an older property, which can cause delays if there are problems with other homes or buyers further down the chain. Putting an offer in on an older property also means you run the risk of being gazumped, which can be both emotionally and financially draining.
Security
New build homes are build to high specifications, and often include high-performance locks, burglar alarms and smoke alarms at standard, which older homes may not have.
Maintenance and renovations
The cost of renovations, extensions, decorating and general DIY work will all add up, and often older homes are not as well insulated or energy efficient, so that is something to take into consideration when looking at homes, as it will increase your monthly outgoings. The general upkeep and maintenance of an older property tends to be higher than that of a new build as well.
Cost – new vs old
New research has compared the cost of one-bedroom flats in every London borough. Older, pre-owned one-bedroom homes cost on average £542,715, while a one-bedroom new build flat costs an average of £679,671 – almost £137,000 more.
Case study
Using the Help to Buy scheme, Sarah and Steve bought a new build home at Redrow’s Lime Tree Meadows development in Shrewbury.
Sarah explains how a new build had never been on their radar: “We had no intention of buying a new build. We wanted an older property with character. My dad mentioned new build and I didn’t even want to look but I went onto Redrow’s website and saw that the nearest show homes were in Shifnal. Within about an hour I had driven to see them and while I was there I rang Lime Tree Meadows, in Shrewsbury, to put a deposit down without even speaking to Steve because I loved what I had seen.”