10 Minute ReadSo, lets jump in and explore my top 5 things I wish I knew before buying a new build property
New Build Premium
If you have a 3 bedroom property in a small town thatโs a new build, and an older property with the same bedrooms, even if done up to a nice spec. Youโll notice that the new build just generally costs more.
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Having a branding spanking new property means that you essentially pay a new build premium thatโs well above what a similar property is worth in the surrounding area.
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To some โ this might make a lot of sense, everything is brand new, never used and that comes with a cost. But also bear in mind that by buying property at a higher price, it means that any fluctuations in the property market could mean that you end up in negative equity. What does this mean? Well it means that if you tried to sell your property, itโs worth less money than what you owe the bank.
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Lets say you bought a property for ยฃ150,000, others in the area are only worth around ยฃ120,000 and the market had a bit of a tumble. If your property was then worth ยฃ140,000 then that means youโd need to find and pay for the ยฃ10k shortfall between ยฃ140k and ยฃ150k or wait it out for property prices to go up again.
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If youโre on schemes like help to buy, there is added time pressure as typically you only get the equity loan for 5 years maximum before you ether have to remortgage or sell up so you could be in a VERY tricky situation if prices remained stagnant.
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At the moment, since COVID โ the london new build market has been relatively flat so unfortunately my flat after it was recently valued is probably still the same price I bought it for โ so not the end of the world but itโs made no capital appreciation in 2 years.
Defects
Naturally, houses are these big complex things with loads of parts, things do go wrong and with the speed that big housebuilders work at now, itโs not uncommon to find a lot of defects.
You might find that small things break, or you might get a few settlement cracks but other homeowners have found things like wonky brickwork, poor plumbing causing sewage to come into their property and even unfinished poor quality jobs around the house that cause issues like damp & water damage to make matters worse.
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It can be quite shocking and new companies have been created that specialise in snagging new build properties to help brand new homeowners like me and you to properly look over our property with an expert eye to help report things like poor workmanship.
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Iโve had some nasty defects in my flat including the bathroom smelling of awful sewage during a hot summer โ turns out the plumbers just didnโt put a cap on the soil pipe meaning my bathroom was completely open to the sewer smells in the main soil stack that goes down to the ground floor โ yes that meant that the smell of poo from all the other flats was seeping into my bathroom, it was horrible.
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My underfloor heating thermostats were all mixed up, meaning the bedroom was heating the bathroom, the living room heated the second bedroom and that was just a real lack of attention on the plumbers part, but otherwise the property for me hasnโt been too bad minus a few smaller issues here and there.
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Living in a Building Site
If youโre lucky enough to move into an early phase of a development then it means youโll be one of the first into your estate or building to start calling your new place home.
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But also remember that if homes are still being build all around you then youโll have to get used to living with A LOT of dust from the building works, dust gets everywhere in your home and youโll be wiping surfaces every day to keep things clean.
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With potentially hundreds of builders around you mixing concrete, drilling, cutting and generally making a mess, the by-products of all of this will end up on your surfaces in your home in the form of dust.
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It also means when driving your car, typically the roads will be covered in mud from diggers and bigger vehicles churning up mud where theyโre laying foundations and where the ground hasnโt been maintained, it gets all over the roads in the estate and your car will definitely pick it up along the way!
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Cheap / Poor Quality
Itโs no secret that new build homes today are of poor quality, if you imagine the standard of building regulations and quality โ new build homes typically tend to just about meet minimum compliance. So youโre not getting some kind of fancy designer home built on Grand Designs with the best materials, typically youโre getting cheap materials, rushed workmanship and a very plain home to suit.
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Iโm definitely seeing more programmes on TV talk about horror stories of poor new build workmanship and Iโd agree โ thereโs a famous saying that they donโt make them like they used to and itโs so true.
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New build homes in the UK are one of the smallest homes in Europe for floor space, houses are built as quickly as possible due to the huge pressures house builders face from the government and ultimately flood into their own business, materials are cheap, poor quality and this will really reflect in the house when you really get to know and understand it after moving in.
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When I moved into my flat, the carpets were super cheap, the kitchen was definitely a cheap job with things not even glued togetherโฆ. and thatโs just the reality of bland box new build homes from new developers.
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However โ if you buy from a smaller developer, youโre likely to get better quality, it only tends to be with the BIG major house-builders you get the bulk of the problems.
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Leasehold Scams
If youโre unlucky enough to buy a leasehold property, leasehold is something that has been around for a long time and is an awful outdated system that dates back a long time when land was owned by a handful of people.
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Typically if you have a flat you can expect to have a leasehold property, this means you donโt own the land the property sits on, but you do own the actual โplaceโ be that a house or like meโฆ a flat. However with that in flats come service charges which can be horribly expensive.
I live in a nice development where we have multiple garden areas, we have a pond, play areas for kids, 24/7 concierge staff but all of this comes with a price and at the moment service charges are costing me somewhere around ยฃ300 a month alone.
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If you have your own house, a normal mortgage is around ยฃ400 โ ยฃ600 so just put that into perspective. Thankfully the government have stopped housebuilders selling leasehold houses on private land as it was incredibly unethical and no reason for them to do it this way so if you buy a new home, you can expect it to be freehold where you actually own the land.
Unfortunately with flats theyโll still be leasehold.
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