Out with the old, in with the new? The pros and cons of buying a new build property

By Jennifer Harrison, Content Lead

Ever thought about buying a new build home? This blog discusses all the pros and cons of purchasing a new build, giving you the benefit of hindsight without having to make any of the mistakes.

Wanting to get on the property ladder? Looking for a bit more space? If the answer is yes, you’ve almost certainly considered purchasing a new build property at some stage. To help you decide what’s right for you, we’ve put together our latest guide; here we explore the many benefits that come with buying a new build, as well as some of the common pitfalls buyers face, and our top tips on how to manage them.

Benefits of buying a new build

Purchasing a new build property can be incredibly exciting. As well as simply being the first person to live there – which is considered by many buyers as a huge plus – there are many practical advantages to buying a new build home as opposed to an older building. What are some of the key benefits?

No forward chain

As the home you’re buying is already vacant, the risk of being trapped in a lengthy chain is minimised; you won’t have to wait for anyone to leave the property. In some cases, the developer may even help you with the sale of your current home (part-exchange/assisted sale), so your move-in date is not dependent on you finding a buyer for your current home.

Energy efficiency

New build homes tend to be far more energy-efficient than older properties because they must comply with the latest building regulations and are built with modern building techniques and materials. As well as having a positive impact on the planet, a more energy-efficient home will lead to cheaper energy bills, saving you money in the long run.

Ready to go

New build properties will be completely fresh, with brand-new flooring, tiling, and paintwork, etc. (though sometimes certain finishes can be considered an ‘extra’). As a result, there should be very little DIY for you to do when you move in. Some developers will even allow you to choose fittings for the property interior, so it is already tailored to your taste when you arrive. All that you need to do is simply move in your furniture and unpack your belongings.

Modern features

Typically, new build properties will offer contemporary design features – such as open plan spaces – and have integrated technology within the home's system. Smart home capabilities, such as the ability to control your heating from your phone or tablet, can make your life much more convenient.

Possible incentives

Some developers will throw in additional extras when securing the sale of a new build. For example, they may agree to pay your stamp duty, offer cashback, or cover the cost of curtains or blinds.

Warranty

New build properties will come with a warranty, and this is something that you will not get with existing homes. Typically, your warranty will cover any issues with the property that may arise within an agreed period (often around ten years), ensuring that these problems will be dealt with by the developer/builder. However, it is essential you check exactly what your warranty covers, as not everything will be included.

Things to watch out for

As with any major purchase, there are always drawbacks; we’ve collated a list of some of the downsides that can come with buying a new build property, so you can look out for them. Although these factors will vary from purchase to purchase, it is important to consider the following:

Premium pricing

New build properties are priced at a premium. Generally speaking, you will pay more for a new build than you would for a similarly sized property, in a similar location, that is ten years older – just for the privilege of being the first person to live there. However, the day you move into your new build property is the day it is no longer ‘brand-new’ and, as a result, the value will depreciate the moment you unpack your first box.

Tip – If you are not intending to stay in the property for more than a year or two, then a new build might not be your best bet, as you’re likely to lose money when you come to sell. However, if you’re planning to stay longer, the surrounding area may develop over time, increasing the value of the property. Or, you may wish to add value yourself through the addition of a conservatory, etc.

Possibility of delays

It is not uncommon for the move-in date on a new build property to be delayed, particularly if you’re buying a property where the development has not yet been completed (‘off-plan’). Not only can this be frustrating, but it also can add to your costs. For example, if you’ve moved out of your current home, you will need to find alternative accommodation during the interim period, which can mean paying for rent and/or storage while you wait for your new home to be ready. In some cases, long delays can also result in your mortgage offer expiring.

Tip – When buying off-plan, having your developer agree to a ‘long stop’ completion date means they will have to pay you compensation should the property not be ready, offering you some peace of mind.

Management charges

Many new build estates are not adopted by the local council. As a result, the residents have to employ a management company to maintain any shared spaces, including footpaths, roads, and playgrounds. This can be quite expensive.

Tip – If the council doesn’t manage the area, not much can be done to avoid these charges. However, simply being aware of them, and taking them into account when agreeing to your mortgage repayments, means you are likely to manage the expense much better.

Complex conveyancing

The legal work for new build properties is, in general, more complicated than for older buildings. In many cases, the developer will push for their recommended conveyancer to be used for the purchase.

Tip – It is crucial to use a licensed conveyancer when purchasing any property and, in this instance, a good solicitor with experience dealing with new builds who is not partnered with your developer is more likely to ensure the contract is in your best interests. An independent solicitor should guarantee that your deposit is completely protected and that a ‘long-stop’ completion date is agreed.

Quality

A brand-new property doesn’t always mean perfection, and you can almost certainly expect a few ‘snags’ when you first move in. This might be as small as a loose tile, but could be as significant as structural issues and, either way, is something you won’t want to deal with.

Tip – It is always recommended, when buying a new build, that you have a ‘snagging survey’ carried out as soon as possible. A professional, who knows what to look out for, will either be able to offer you reassurance that standards are high, or liaise with the developer to resolve any problem areas.

Ongoing construction

Often, when new homes are built, there are plans to build even more houses nearby, and develop the surrounding area too – which can, of course, be part of the appeal. However, if you’re one of the first people to move into the development, you might find yourself living on what is essentially a building site for several months.

Tip – Knowing what to expect can play a big role in relieving any frustrations that might come with ongoing construction. Before you decide to purchase a new build, it’s a good idea to discuss with the developer exactly how long they intend to work on the development after you’ve moved in and what the plans are for the surrounding areas.

Buying any property is a big decision, and one that comes with a huge financial commitment, so it’s incredibly important to choose the home that’s right for you and your circumstances. The decision as to whether or not to opt for a new build will ultimately depend on your personal preferences and your budget. We recommend seeking the advice of a mortgage broker who can guide you through the many options available to you. You can find a mortgage broker here.

To find out more about what we can offer to borrowers, see our latest products and criteria on our website. Be sure to follow us on all social channels for news and updates.

All information contained on this blog is for general information use only. It does not provide mortgage advice and should not be construed as being mortgage advice, which can be provided by your mortgage broker and advisor only.