The government has pledged to build 300,000 new build homes to try and tackle the national property shortage, they are even giving incentives when you buy a new build home.
For as little as a deposit of 5% and a government loan of between 15% and 40%, depending on where in the UK you live, using the Help to Buy equity loan scheme you can get on the property ladder.
The added benefit is, new-build properties should be better insulated than period homes so your energy bills could well be cheaper than buying a period home.
If you’re buying off-plan ( before it’s been built), you may be able to choose certain aspects of the design i.e your kitchen or whether you have a fireplace of not.
However, there are some disadvantages to buying new-build homes, including the fact that it can sometimes be more difficult to get a mortgage.
What’s included in a new-build property?
Exactly what’s included varies depending on the developer and what they are offering. You may get the white goods – washing machines or dishwashers thrown in, as well as wooden flooring. Others may offer to install flooring or carpet but at an additional cost.
One of the great advantages of buying a brand-new property is that, often, many of the fixtures and fittings you’d otherwise have to fork out for are included in the price.
Developers often try to upsell you extra items. Be wary here – the price of these could be inflated, and it may be much cheaper for you to source and pay for them yourself.
Today’s building rules and regulations mean that there are standards developers have to meet to make your property as energy efficient as possible. Energy-efficient features could include double or even triple-glazed windows, insulated walls, roofs, and doors, and energy-efficient heating.
Can you negotiate on new-build prices?
Prices for a development’s one, two and three-bedroom properties are often plastered all over the hoardings when properties are being built.
Of course, the developers will tell you that this is the price you’ll have to pay nethertheless it is only an asking price, and you should be prepared to try and negotiate.
The likelihood of success will depend on a number of things, such as where the property is and the level of demand, as well as how far along the development is.
It pays to do your research, looking at sale prices of similar properties nearby using online sites like Rightmove and Zoopla.
If your attempt at getting a discount fails, there are other ways to potentially reduce your costs. You could ask the developer to cover your stamp duty costs or negotiate ‘extras’, such as flooring or furniture, for free.
Is there a new-build premium?
You might have heard of the ‘new-build premium’, a term used to describe the fact that new-build properties tend to be pricier than older, but otherwise similar, properties. The reason for this difference is that everything is new and unused, energy efficient and built to a high-quality specification.
Some people believe that, on top of the standard new-build premium, developers have been charging an even greater ‘Help to Buy premium’ to those using the government’s equity loan scheme.
Try to stay level-headed and don’t be too wowed by a new-build show home. Do your research, find out about similar properties in the area and on developments, and make sure you don’t offer more than you can afford.