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Help to Buy – advice on buying a new home

Wednesday 3rd April 2013

As a new rush of buyers wanting to take advantage of the new Help to Buy scheme consider new build perhaps for the first time, Nick Evans of Stacks Property Search offers advice on buying a new home.

+ A new property is only ‘new’ for a very brief period of time, and you will be paying a premium of as much as 25% for its newness, much as you do when you drive a new car out of a showroom. So it’s always worth comparing similar ‘old’ properties, in terms of value, space, rental value etc. just so you are going into the purchase with your eyes fully open, and a full grasp of the local market. Check the price per square foot and compare it with the resale market so you understand the extent of any premium you’re paying.

+ Be aware of completion dates for all phases of the development. If you buy early in the life of the development you may get a good price, but you run the risk of living in a building site for months or even years to come.

+ if you’re buying on a development, find out what’s been paid for similar houses before you start negotiating, and remember that developers will be pressurized towards their year end, so that may be the time to put in a silly offer. Push for serious discounts in addition to any financial incentives that are being offered.

+ New homes can be incredibly small, but it’s easy for the eye to be deceived when you’re viewing, either because there’s no furniture at all, or because furniture is minimal and specially designed and arranged to make the rooms look bigger.

+ Don’t be seduced by clever marketing. However clean, new and packed full of modern technology the property appears, try to picture how it will look five years down the line.

+ In a weak market people prefer to play it safe and opt for traditional styles – avoid cutting edge architectural statements as property can date incredibly quickly.

+ Buying off plan is a high risk strategy in the current market, but if you’re looking at substantial discounts (up to 40%) it may still pay dividends. And remember that the first and last properties on a development are the ones the developer is most anxious to sell and are where the best deals are to be found.

+ Get a full structural survey. In an old house you can often see what’s wrong, but with a new one the problems won’t have come to light. Don’t assume that the NHBC guarantee covers you for problems that arise – claiming for problems in this way will give you years of torment and aggravation.

+ A new home should be energy efficient and low maintenance; you have a blank canvas to work with; there will probably be plenty of modern technology, fixtures and fittings, and security and safety features; and the purchase should be straightforward without the confusion of a chain. But do check that this is the case. Have a look at the Energy Efficiency Rating - don’t expect it to be up there in band A, with a 100% rating. Most new houses are generally in category C of the energy efficiency rating (69%-80%), and ideally it should be at the upper end of that category.

+ Builders and developers have been through a tough period and their margins are tight; there’s a possibility that they may have cut corners and quality. Make sure there is a snagging arrangement in the contract – many developers are trying to avoid this, but it’s often the case that you need to live with a new house for a while before problems materialize.

              

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