Is Buying A New Build A Good Investment

Ah, the age-old question, “is buying a new build a good investment?” While there are many great property investment strategies to choose from, one that many are still unsure on, is new build property investment. In this article, we explore the pros, cons and best practises.

Why consider new build property investment

In 2015, the UK government committed to building 300, 000 new houses per year by the mid 2020s in a bid to tackle the under-supply of housing. Although numbers have fallen lower than this thus far, this has inevitably resulted in a huge increase in new build homes across the UK.

One of the many reasons home buyers and property investors may favour new builds is because they are usually hassle-free. You rarely need to undertake any substantial structural or interior changes before moving in, saving you time and money.

Also, new build and off-plan property investments tend to keep their value, making them attractive potential investments. And with government  Help to Buy schemes available only on these type of properties, you can benefit from lower deposits and interest rates.

The cons of buying new build property 

While mew build homes are likely to incur cheaper energy bills due to better insulation, there can often be complications with new builds you may not experience with existing housing stock. According to the 2018 New Homes Review – 91% of new home buyers experienced defects with their new build home, including ill-fitted doors, windows and guttering issues.

Another downside is new build property tends to come at a premium. According to Aspen Woolf, New homes are generally priced to the maximum the market will allow, and, on average, come with a premium of around £5,000 to £8,000 compared to an older house 

Best practices when it comes to new build property investment

Overall, new builds may seem more appealing to property developers as they are more hassle-free but it’s worth considering the following if you are interested in new build property investment.

• Location still matters when it comes to buying a new build property

• New builds tend to be less spacious than existing houses

• According to Hamptons, in 2020, 10% of people selling their new-build properties did so at a loss, compared to only 4% for those selling existing properties.

• New build and off-plan property usually requires only 5% deposit if purchased under the Help to Buy scheme

• Although new home developers will always state their price, don’t be afraid to negotiate

We hope this article has helped you find the answer to the popular question – “is buying a new build a good investment?” For more property investment tips and strategies, visit our blog here