New Build vs Existing Home
New year, new home. 2020 may be the year that you’re committing to finally purchasing a home of your own. Maybe you already own property but are looking for something new ahead of an exciting period of your life such as adding to your family or entering retirement.
There are a lot of questions that will arise during your conveyancing process such as, ‘where should I buy a house?’, ‘how many bedrooms do I need in my new house?’ and ‘what is an appropriate budget for my first home?’ All of these queries are important factors to consider carefully with your partner or co-buyer as well as professionals such as a financial planner. Another crucial question that is often less considered beforehand however is, ‘should I buy a new-build or an existing home?’ Your ultimate decision could have much more consequence than you think…
So what is the answer? Is a new-build home a better option for first-time home buyers? And what about for seasoned investors? Perhaps though there are other merits to an existing home? In this article, we will examine the pros and cons of both new-build homes and existing homes so that you can come to your own decision. First, given how popular new-builds currently are (in 2018, 165,090 new-builds were added to streets across the UK!), let’s start with the pros of new-build homes.
New-builds - The pros
1.) It's ready to move into - The beauty of a new home is that it’s a blank canvas. There will be fresh tiling, paintwork, kitchens and bathrooms. As such, you won’t have any timely renovations to do before it’s in a liveable state to move into. Sure you may want to decorate in a manner that makes the place yours, but this can be done at your leisure - and on a budget. Quite simply, you can unpack your belongings and get living in your new pad, pronto!
2.) There will be modern amenities - You won’t need to worry about that oven that doesn’t work or those handy tech elements an existing home likely won’t have, as new-builds these days are complete with all the modern luxuries we’ve come to expect. Many even offer ‘smart home’ features and the likes of gyms or concierge services in the complex.
3.) It's not always as 'catalogue' as you may think
- Buy off-plan - that’s when you purchase your home
before the developer has finished building it - and you may be able to have a say in the design. The builder may let you choose fittings and perhaps even the layout.
4.) You'll likely receive a warranty - Most new builds come with a warranty, so if something goes wrong, you may be covered for it financially.
5.) There's help available
- There are a number of Government schemes available for first-time buyers
buying new builds, such as Help-to-buy and Shared Ownership. Furthermore, Some developers will throw in extras in order to get a sale e.g. carpets or stamp duty costs.
6.) Less stress - New build homes have to comply with the latest building regulations. This means they are far more energy efficient than older properties. Data from Energy Performance Certificates shows over 80% of new homes have the highest A or B ratings. That compares to just 2.2% of existing properties.
New-builds - The cons
1.) It's value may not increase
- When a new-build is no longer, well, ‘new’, its value can drop. That is because potential buyers will of course be more likely to opt for a newer new-build in the area, if available. If you are looking to purchase
a new-build, plan to stay there for some time or choose your area wisely.
2.) It may be a leasehold
- It's likely your new-build may be sold as leasehold
rather than freehold
which could make the conveyancing process more expensive. It’s also an issue if the leasehold period is less than 90 years. Get expert advice before locking in a leasehold purchase.
3.) You'll likely have less space - Often developers want to make more profit by packing as many properties into a site as possible. As a result, many new-builds have minimal storage space and small garages, for example. Probably best to check your car fits before you lock anything in!
4.) The odd snag here and there + quality issues - There is truth to the old saying, they just don’t make them like they used to! Often new-builds are constructed to standards that aren’t as high as existing, older properties. As such, it’s a good idea to have a ‘snagging survey’ done by a professional as soon as you’re allowed on site. You can ask the builder to sort any issues that immediately arise.
Existing properties - The pros
1.) More space to live - Existing properties tend to be bigger, with more bedrooms, and often gardens or outside areas. More room to live and grow!
2.) It's easier to understand what you'll get - Buying off plan means you can’t physically see your new home before you move into it. It’s much more ‘what you see is what you get’ with an older property.
3.) It's likely to increase in value - Older properties generally have more potential than new-builds in that there should be plenty of room and opportunity to renovate and make improvements. These changes could really increase your home’s value so, if you decide to eventually move on, you’ll make money.
4.) Prime location - Many older homes were built at a time when the area itself was in its early development stages. Now it’s probably in a very desirable place to live with lots of local shops, schools and more nearby!
5.) The character - Period features such as Victorian fireplaces and the sash windows of Georgian properties are those little things that really make you fall in love with a place and can just never be replicated in a new-build.
6.) The community - If you move into an older property, there’s likely to be an entire established community in the area, residents who have lived there for years, which could mean making friends is easier, there will be groups to join, etc. There may also be more amenities close by.
Existing properties - The cons
1.) The chain! - As already mentioned, the conveyancing chain can be very complex. Your conveyancer will have to deal with the owners and any onward property chain which can take time and cause stress.
2.) Maintenance and unexpected costs - An old home has seen its fair share of wear and tear over the years, which may lead to unexpected maintenance costs. Remember - sometimes surveys don’t pick up everything! You’ll need an emergency budget in place in case of unforeseen expenses. Then of course there is also the expense of renovation or redecoration.
3.) Less energy efficient - Older properties tend to have higher electricity bills than newer ones, not great for the environment or your bank balance!
4.) Insurance costs could be higher
- When you purchase a home
of your own, it’s a good idea to take out a home insurance policy. Insurance companies know that older homes are likely to have hidden issues (e.g. with plumbing or electricity systems) and often raise insurance premiums as a result.
Conclusion - Is it better to buy a new-build or an existing home?
The answer to the question ‘is a new-build or existing property best’ will completely depend on your individual preferences, personal situation and the property itself.
Those with higher budgets, more time to spend on renovations and dealing with maintenance issues and a flair for the unique can definitely opt for an existing, older property. In fact, we would advise it. Imagine how bored you’d get in a new-build!
For first-time buyers with lower budgets and less time and energy to commit to a property, a new-build could be the answer for you.
If you’re a landlord, either could work, depending on the type of tenant you wish to attract and the area you’re buying in.
Of course, there are exceptions to every rule, however.
Who are GWlegal?
GWlegal are a property solicitors based in Liverpool, specialising in buying or selling, remortgage, declaration of trust, bridging and buy-to-let landlords.
If you have a legal matter you wish to discuss don’t hesitate to get in touch. You can call us on 0345 373 3737 email us firstname.lastname@example.org with your question.
Who are GWlegal? We’re a national firm with local values.
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Content correct at time of publication.