The demand for new-builds is as high as ever, with the government struggling to hit their “300,000 homes a year by the mid-2020s” manifesto set out in 2019 by the Conservatives. However, the issue of housing shortage still remains if the vast majority of new-builds are unobtainable by the average family.
According to the latest Gov.uk UK House Price Index, the average new-build property is priced at £394,699. This is a 36% premium compared to the national average priced home which sits at £289,807.
Yasin Kayhan, Head of Mortgage at Sambla has shared five tips when buying a new-build house in 2023.
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Warranty
To get the best value out of your new-build home, getting a good warranty is important. A warranty is a contract between the home buyer and the home builder that ensures that the builder provides any replacement or repairs necessary in the agreed time. The average warranty was ten years, however the government now requires building companies to provide a minimum of a 15 year warranty for all new-build homes. So ensuring this is in place is vital, if you can get any more years added onto this then that would be even more beneficial.
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Research your developer
When looking to purchase a new-build property, do some research into which company is building your home. Property developers are often hot topics in the press, so read past articles and look at reviews from previous buyers. Those you see have a bad reputation are best to be avoided, as it could lead to problems down the line. A few examples could be faulty building work, delayed house completion or a lack of communication when it comes to getting faults fixed.
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Plan to stay put
On average, new-build homes sell at 14% below their original asking price, but this doesn’t mean it will stay like that forever. With the current housing market, it’s likely that your house will increase in value over time. Research the house prices in the area you are looking to move into and see what the increase has been like in the past ten years.
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Always Negotiate
Like when buying any home, you can always negotiate. Developers can be flexible when it comes to selling. Buying with cash is always a good way to get a discount due to the convenience, so if you have the money it’s definitely worth splashing out to save money in the long run. It is very common that these companies try and sell these houses as quickly as possible, as if a house isn’t sold they aren’t making any money. You’ve got to be cautious when doing this however, as if there is a lot of interest in the house then they may accept another offer over yours.
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Think about delays
New-build properties are notorious for delays, so if you’re planning to sell or move out of your current home take that into account. The last thing you want is to become homeless due to a delay and have to pay out extra to stay in a hotel or AirBnB. A good way to resolve this is to insist on the developer having a ‘long stop’ completion date. Doing this will force the company you buy your new-build from to pay you compensation if there are any delays beyond this date. That compensation can then pay for your temporary hotel or rented property so you’re not out of pocket.