There’s definitely something to be said for investing in a new build home, from their energy efficiency, to the high-quality building work, and even the sense of community that new housing developments create. These benefits are just some of the reasons why the new build market has increased in popularity over the past few years. Keep reading this article to find out what a new build home could offer you.
What are the benefits of a new build house?
According to data taken from our My MAB app, there was a 21% increase in people interested in buying new build properties in 2024 compared to 2022/23. Our expert new build adviser, Mark Pender, shares his thoughts on why this may be:
“The new build sector is far more innovative than second-hand purchases. With new builds, people are selling houses as a business, so there is more scope for buyers to benefit from incentives - whether that’s the inclusion of carpets, flooring, grass, outside taps, or the improved incentive schemes on offer.”
Making the space your own
If you purchase a new build before it’s complete, you may have the option to personalise certain features, as well as adding any finishing touches - all without having to put in the DIY work!
This could be anything from choosing carpets, paint colours, tiles, and even your garden details. You'll also be able to choose from a variety of standard features and include optional extras, including additional lighting or built-in wardrobes.
With a new build home, you have the potential to make a considerable saving through these personalised touches, as developers can purchase these materials in bulk. This means that you won’t have any of those annoying finishing touches left still to do when you move in.
If you’re renovating an existing home, you’d likely need to work with traders and source your own materials, so make sure to factor this into your decision when considering which property type is the right choice for you.
Developer warranties and incentives
Developers are really keen to keep you happy before you’re moved into your newly built home., After all, if you’re excited about moving into the property, you’ll be less likely to drop out of the sale. Therefore, it’s common practice for first time buyers, and current homeowners alike, to be offered various incentives.
Many developers will provide buying schemes like Stamp Duty covers, deposit contributions, and easy move schemes, as well as access to incentives such as part exchange, and Own New (a reduced interest rate incentive scheme).
There are other schemes, such as Shared Ownership, that helps prospective and current homeowners afford new build properties. You may also find that a Lifetime ISA (LISA) offers benefits in terms of topping up your deposit.
Developers will sometimes even cover solicitor fees or removal costs to help make the purchase more affordable for you. New builds also come with a 10-year warranty, which should eliminate any concerns you have about the longevity of your build.
Our expert advisers can talk you through the mortgage options available to you, providing clarity on which is the most suitable option for your needs and circumstances.
Highly energy efficient
Did you know that 85% of new build homes in England and Wales have an EPC rating of A or B? New builds are constructed with the future in mind, and as energy costs increase, so will the desire to live in a home that’s efficient straight out of the box.
Furthermore, energy efficient houses could be up to 55% cheaper to run, and reduce your bills by £2,200 each year. This sort of saving can be beneficial for any buyer, and enables them to put the money towards things they really want to spend it on, such as their dream sofa or dining table, rather than the running costs of the property.1
The Home Builders Federation is urging the government to work with lenders to expand the market for green mortgages, whereby the savings that energy efficient homes can offer on utility bills are factored into mortgage affordability criteria.2 New build adviser, Mark Pender, comments on noticing this shift:
“We’re already beginning to see some lenders take into consideration the cost of running a new build compared to a second-hand property, and the amount of money that can be saved, when calculating affordability. This is great news for borrowers and another perk of buying a new build.”
Cheaper alternative to renovating
It’s no secret that renovations can be expensive and time-consuming. If your home is in desperate need of some work, it’s worth noting that the average cost for a renovation (for a three-bedroom home) is £76,000. 3
There are ways to fund a renovation using the equity in your home. If this is something you’re interested in, check out our remortgaging to renovate article. However, if the cost for your renovation feels rather steep, consider asking yourself “should I buy a new build house?” for the same benefits.
New builds adhere to strict building and energy efficiency regulations, so you can ensure they’re built to a high standard. They also come with ‘snagging clauses’, so any issues related to the quality of the building work after you move in must be fixed by the contractor.
Modern and spacious
Modern living is its own beast these days, with more people working from home, looking for flexible living spaces, and interested in full tech integration. New build homes are typically designed to be more open-plan, with living areas that can be adapted to the owner’s preferences. They will also usually have more evenly-sized bedrooms, multiple bathrooms, and pre-built storage - which is a must-have for families!
When it comes to space, new builds are roomier than existing properties on average. For a house, a new build has an average floorspace of 109.34m2 compared to 101.74m2 for existing properties.3 This may be surprising for some, as new builds have had a reputation for being smaller than your average existing home.
What else should I consider?
There are some factors you’ll need to take into account when searching for your dream home. New builds might not be suitable for everyone, and the primary obstacle could be cost. New builds can be more expensive3 than your average second-hand home, but remember, the running costs will be lower.
Secondly, if there are delays in construction, your move date could be pushed out. Developers have a short stop and a long stop date, which essentially are two deadlines. They are legally bound to finish development by the long stop date, but the main concern here is that your mortgage offer could expire before the build has completed. This is why it’s recommended to work with a specialist new build adviser, who will be experienced in dealing with these types of situations.
Finally, lenders can be a bit stricter with new builds than existing homes, particularly regarding the loan-to-value (LTV). This means you may need a bigger deposit than you would need for an existing property, but a new build adviser can talk you through what help is available to you, such as the Own New which could get you on the property ladder with just a 5% deposit.
Should I buy a new build?
While we can’t give you a definitive answer, we hope this guide has helped demystify the benefits and considerations of buying a new build. Everyone’s circumstances are different, but hopefully we’ve given you more of an indication as to whether it’s a suitable option for you.
If you want to explore the idea of buying a new build house, be sure to search online for new build houses in areas you’d like to live in, visiting show homes to get an idea for current styles and locations. This is also an ideal opportunity to enquire about any incentives or schemes offered by developers you may be able to take advantage of.
Our expert advisers are always on hand to chat through your options, and will be happy to help.
References:
1 Watt a Save, 2023
2 HBFT, 2024
3 Checkatrade, 2024
Frequently asked questions
This depends on your individual wants and needs, and largely depends on what factors are most important to you when buying a home. If a modern home with lower running costs is important to you, then a new build home could be worth exploring further.
Typically, this can vary depending on the developer. Some developers will insist you sell your house before making a reservation, however, some offer part-exchange deals, so always check with your developer.
The reservation fee should be deducted from the price of the property. However, if you end up pulling out of the sale, you may not be refunded the reservation fee.
Some developers allow you to choose your own finishings, such as kitchen flooring, bathroom tiles etc. whereas others may give you a selection to choose from.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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