Should you buy a new-build property in Tamworth?

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. 

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More Than Eighteen Babies Born for Every New Home Built in the Past Five Years in Tamworth

More than 18 babies have been born for every new home that has been built in Tamworth since 2012, deepening the Tamworth housing shortage.

This discovery is an important foundation for my concerns about the future of the Tamworth property market – when you consider the battle that todays twenty and thirty somethings face in order to buy their first home and get on the Tamworth property ladder. This is particularly ironic as these Tamworth youngsters’ are being born in an age when the number of new babies born to new homes was far lower.

This will mean the babies being born now, who will become the next generation’s first-time buyers will come up against even bigger competition from a greater number of their peers unless we move to long term fixes to the housing market, instead of the short term fixes that successive Governments have done since the 1980’s.

Looking at the most up to date data for the area covered by Tamworth Council, the numbers of properties-built versus the number of babies born together with the corresponding ratio of the two metrics …

 

It can be seen that in 2016, 7.68 babies had been born in Tamworth for every home that had been built in the five years to the end of 2016 (the most up to date data). Interestingly, that ratio nationally was 2.9 babies to every home built in the ‘50s and 2.4 in the ‘70s. I have seen the unaudited 2017 statistics and the picture isn’t any better! (I will share those when they are released later in the year).

Our children, and their children, will be placed in an unprecedented and unbelievably difficult position when wanting to buy their first home unless decisive action is taken. You see it doesn’t help that with life expectancy growing year on year, this too is also placing excessive pressure on homes to live in availability, with normal population growth nationally (the number of babies born less the number of people passing away) accumulative by two people for every one home that was built since the start of this decade.

Owning one’s home is a measure many Brits to aspire to. The only long-term measure that will help is the building of more new homes on a scale not seen since the 50’s and 60’s, which means we would need to aim to at least double the number of homes we build annually.

In the meantime, what does this mean for Tamworth landlords and homeowners? Well the demand for rental properties in Tamworth in the short term will remain high and until the rate of building grows substantially, this means rents will remain strong and correspondingly, property values will remain robust.

If you are thinking of getting into the property rental market and don’t know where to start, speak to us for impartial advice and guidance to get the best return on your investment. For more information about other potential investment properties that we could introduce you to, or to ask about our thoughts on your own investment choices, call us now on 01827 425195, you can always email me on  Lorraine@hallandthompson.co.uk

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