Should I buy a new build?

If you’re thinking about buying a new build, we round up some of the pros and cons to help you decide.

New builds

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New flats and houses are being built all over the country with many properties snapped up before they are even built.

A brand new property appeals to many people, but buying a property directly from a developer comes with its own set of challenges.

We take a look at some of the advantages and disadvantages of buying a new build.

The advantages of new build

Your home is a blank canvas

The big appeal of a new build is that it's brand new – no one's lived in it before and your home will be free of anyone else's dodgy decorating tastes or DIY failures.

If you buy off-plan (before a property is built), you may be able to choose the exact plot of your home as well as choosing flooring, wall colours, and fittings and fixtures.

You can haggle over the price

Housebuilders are keen to sell new homes off-plan so they’re often willing to negotiate the price or throw in incentives to secure a sale. For example, they might pay your stamp duty or legal fees, or include white goods such as a washing machine or fridge freezer.

You won’t be in a chain

If you’re a first-time buyer and are buying a new build, there won’t be a chain above or below you. Being chain-free removes one of the biggest stresses and causes of delays in the home buying process.

Your home will be energy efficient

New build homes have to comply with the latest building and energy efficiency regulations. This means your energy bills should be lower in a new build than an older property. Your home should not need as much maintenance as an older home either.

You’ll get a warranty

Most new build properties come with a 10-year warranty. The National House Building Council (NHBC) warranty is the most common, covering 80% of the new build market. This will protect you if the builder goes bust during the building process, as well as offering cover for defects and structural issues.

You can get help from the government

If you buy a new build you can take advantage of the government’s Help To Buy Equity Loan scheme.

Under the scheme, the government lends you up to 20% of the cost of your new build home, so you’ll only need a 5% deposit and a 75% mortgage to make up the rest. You won’t be charged interest on the government loan for the first five years of owning your home.

What to watch out for with new builds

You’ll pay more for a new build

You’re likely to pay more for a new build home than an comparable older property. The extra cost is often called the "new build premium". 

Paying a higher price for your home can be a bit of a gamble as your purchase will be based on brochures, plans, and a visit to the builder's marketing suite, rather than viewing a finished property.

Bear in mind that new build properties are often smaller than older properties – clever dressing of a show home may disguise this.

There may be snags and defects

New build homes are not always built to the standard you might expect. Most new builds will have minor "snags" such as loose tiles or ill-fitting doors. Getting a snagging survey done can help identify these issues and you can then ask the builder to rectify certain things.

Some new builds have much more serious defects that are either immediately apparent or will manifest themselves later on.

You could have issues with your mortgage

Not every lender lends on new build properties and those that do are often a lot stricter on the amount they are willing to lend. It’s therefore important to shop around carefully and it could be worth using a fee-free broker for guidance.

Most mortgage offers are only valid for six months. This can be an issue if you’re buying off-plan and there are delays in the building process. If your mortgage offer expires before completion, you may need to start the mortgage application process all over again.

You may have to pay ground rent and service charges

Most flats are leasehold, as opposed to freehold, and many new build houses are also sold on a leasehold basis.

Leasehold means you don't own the land the property sits on and will have to pay an annual ground rent to the freeholder. You’ll also have to pay service charges for maintenance of the communal areas of your block or estate.

It’s therefore important to check whether the home you want to buy is leasehold and what the extra charges will be.

You might have to pay the developer more later on

Even if a property is freehold, there may be covenants written into a property’s title deeds obliging the owner to pay for certain things, or banning specific activities. For example, if an estate isn’t adopted by the council, residents may have to pay for the upkeep of the road and grass verges.

Covenants might also stop you from parking a van or caravan on your drive or owning a pet. In some cases, you’ll need paid-for permission from the original developer if you want to alter or extend your home.

Again, it’s well worth checking this and factoring any extra charges into your budget

Completion may be delayed

Building projects aren't always completed on time and it's not unusual for the move-in date on a new build property to be delayed. This can be stressful and can add to your costs if you need to rent somewhere to live or store your possessions.

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