Buying a new build home in the UK can be a huge moment for some. It could be a first home for a young couple, it could be the forever home for a family. We’ve all seen it – the instagram pages dedicated to someone’s new build they bought from one of the big housebuilders, decorated with items from the range, B&M and home bargains.
But what if I told you that as nice a new build homes are – those who buy new build properties pay that premium and are missing out. Why? Well there’s so much value they could have otherwise generated by buying an older house and doing it up.
Buying an old house for cheaper and spending money on a refurbishment to create it the way you want allows you to boost the value of a property and benefit completely tax free from that upl
Pros and cons of a new build
- Nice new home, never lived in before. You can smell those fresh carpets. Not a single nail has been put into the walls. The paint is still drying and the turf outside in the garden has only just been unrolled in the past week.
- Can sometimes choose the carpets, kitchen and interiors
- Live in a nice estate with other people doing a similar thing to you, you slowly get to see your new community grow.
- Defects can be a pain – houses are big things to build and bits will always go wrong whether it’s settlement cracks, dodgy workmanship, the cheap materials that the big house builders use. You usually get a warranty to fix them for free but you have to keep an eye on them.
- You usually pay a premium for a new build, similar properties in the area that are older typically are less expensive and more in line with the local area.
- If you’re buying off plan, you’re taking a bit of a gamble, especially if you’re not with a major housebuilder, but you can’t actually see what you’re buying. I was stung by this when my floorplans showed 2 balconies in the flat, turns out that was wrong when I went to go and see the property when it was done half way through purchasing.
Pros and cons of an old build
- You can buy an old house for a cheaper price, and use the savings to refurb the house to make it your own. This means you can rebuild walls, plan out the spaces, choose everything and make it into a fun project to make a house a home.
- You can gain value in the property which ends up being completely tax free if it’s your main residence that you live in.
- It’s a great way to hack yourself up the property ladder buying somewhere, doing it up, living in it for a bit and moving on. That’s how some people work their way up to million pound houses by doing this.
- It’s an old property – you might find some skeletons in the garden, who knows. Some buildings have asbestos which needs professional removal, may have structural issues that need addressing, builders and tradespeople could let you down and refurbishing a house isn’t cheap – so it’s not for the feint hearted.
Personally, I wish I would have bought an older property and spent the time doing it up, not only for the huge sense of achievement but also the gain in property value as well. Typically new builds go down in price after you buy them, a bit like a car.
This is because new builds have the premium price tag that’s out of character for the area, so they come down before they go up – meaning it can take a while to start seeing any equity in your property. If you have a high loan to value mortgage, it also risks putting you in negative equity and not being able to sell if you needed to in an emergency without losing money.
At the end of the day – it’s totally up to you and your preference, each option has it’s pros and cons, for me personally I’ve enjoyed living in a new build and I’ll be glad to say I’ve done it – but I can’t imagine buying another one in the future, unless I built it myself from scratch – and that’s one for another video.