Buying a New vs Old Property
Buying your dream property is amazingly exciting if a little stressful at the same time. There are a lot of different aspects to consider throughout the purchasing process and things don’t always run to plan.
For first time buyers, it’s even more eventful.
One choice you will have to make is between buying a newly built property or an older one. While some of this will depend on where you intend to live and what is available there, for first-time buyers there’s one vital consideration.
If you want to access the Help to Buy scheme, then you will need to focus exclusively on buying a new property or one that is currently under construction.
Here we look at the pros and cons of buying an old property vs a new one and what you need to check off your list when you are trying to pick the best home for your needs.
Buying a New Build Property
First, we should come up with a definition: A new build house or a flat has recently finished construction and has NEVER been lived in. This is an important distinction when it comes to the Help to Buy scheme.
You may have a building site near you where properties are currently being constructed – the good news is that you do what is called buying off-plan which means you can purchase the property while it’s still being erected by the builders.
Another thing to consider is the availability of properties of this type. Despite promises to create more new homes, the housing market for the UK has often struggled to keep up with demand. In 2020, according to the National House Building Council, just over 123,000 new homes were registered (down nearly 40,000 on the previous year).
That may not seem a lot, particularly when you consider that there are generally around 350,000 first time buyers on the market each year, but not all people are looking for new build properties.
If you have found your new build, however, it’s important to do your homework and check out the property, including where it is located and whether it properly fits your needs.
Check the Builders
The first thing to do is look at who the builders are working on a particular development. What usually happens is that a developer will open a show home while the area is still under development. This gives you a chance to see for real what your new property is going to look like. You’ll also be given a whole host of marketing material that tells you how wonderful it is and why you should buy.
Our first top tip is not to take this at face value. Do your homework and research the developer in particular. There will be plenty of information online. Look for any complaints that new owners have had once their property has been finished. The vast majority of new build properties are excellent and well built but it’s best to do your due diligence and not leave it to chance.
It’s not unusual for new properties to have teething problems so one of the important issues is to find out how the developer deals with these. They have a legal responsibility to put any faults right and promptly.
Quality of Work
You might expect if you’re spending £150,000 on a new build property that it will be perfect. This is not always the case. That’s why it’s important to have a private survey done. This is normally called a ‘snagging’ report and it is usually carried out when the building has just been finished or is close to being finished.
It’s important to do this before your completion date if you have decided to buy a property. It’s also important to hire an independent surveyor rather than use the developers first choice.
The report will look at the quality of the work being undertaken and highlight whether there are any issues. Once finished, it can be given to the developer and they have to put any problems right before you move in.
Commonly, the things that a snagging report highlights are issues with poorly fitting doors or badly applied plastering but sometimes they can unearth major structural issues that could affect your decision to buy.
What to Look Out For
First, look at the location. Is it right for you? For example, you might be interested in the nearby schools or where the nearest supermarket is. If you commute, how easy is it to get to work?
It’s also important to look at the overall layout of the development. Sometimes builders will try to cram properties together to maximise their profits which can make some sites look and feel a little claustrophobic when they are finished.
One of the big advantages of new builds is they are generally much more eco-friendly and well insulated. Many also have smart technology added that allows you to control heating and lighting. It’s worth checking what you are being offered here and whether a reasonable amount is being charged for these.
Buying Off-Plan
It’s important if you are doing this to ensure that you have the agreement for a mortgage and have worked out how to access the Help to Buy scheme if you need it. Once you’ve arranged your mortgage, you can then put down a deposit on the house and exchange contracts.
The big challenge is that you need to wait until the property has been built which can take anywhere up to 6 months. Buying off-plan has another advantage if you get in early. Builders and developers are often looking for additional finances to finish their site and you may be able to negotiate a lower buying price.
Pros and Cons of Buying a New Build
There’s a lot to unpack here and there are plenty of pros and cons to consider before you opt for a new build:
- If you plan to access the Help to Buy scheme then you have no choice but to buy a new build property. The good news is that, even if you have to compromise on your dream home, it gets you on the housing ladder.
- The great advantage is that new builds come with all mod cons and you shouldn’t have to worry about maintenance or repairs for at least 10 years. They also tend to be a lot more energy efficient which will cut the cost of future bills.
- On the downside, you will be limited to the locations where new builds are being constructed. This could mean that you will need to move out of the area where you are currently living.
- Some mortgage lenders put limits on the amount they are willing to loan for a new build property. If your property is still being built, remember that mortgage offers are generally for around 6 months and you may need to negotiate an extension if there are delays.
Buying an Old Build Property
One of the key benefits of older properties is that there are a lot more of them to choose from. It’s easier to find a home near to where you want to live, whether you’re looking for a flat or a house. While there was a slump in houses being put on the market at the beginning of the Covid pandemic, these have recovered quickly and you should be able to find plenty of properties in your area.
One of the key issues with old build properties for first-time buyers is that you can’t access the Help to Buy loan scheme. If you have enough for your deposit and you are searching for a property, however, there is much greater scope.
Older homes tend to be roomier than modern ones and have more character as well as established neighbourhoods around them.
Condition of the Property
The first thing you will need to do is start identifying and viewing properties and it’s important to have a checklist for your ideal home and what you are looking for. That may include location and neighbourhood as well as the number of rooms, even whether the property has a garden or not.
At some point, if you are planning to buy a property you will need to have a survey carried out to check the structure. But during a viewing, you can also make simple observations on the condition of your potential new home. For example, you may want to look for signs of dampness, whether any repairs or changes might be needed and even which way the house faces.
Most viewings are staged to make the property look at its best, so don’t be afraid to look behind furniture and check nooks and crannies. Other things to consider are room size and whether you’ll need to update areas like the kitchen.
What to Look Out For
There are a hundred and one things to look out for when buying a property. For instance, don’t just check out the house or flat but look at the surrounding area – is it clean and friendly looking? Are the main amenities (schools, shopping, train station) nearby?
You should also be asking important questions such as how much the utility bills are. Older houses are sometimes less well insulated which can add to the cost of your gas and electricity. If tech is important to you check the mobile 4G/5G reception to make sure you’re not in a blind spot. Ask about the neighbours and look to see how the parking is.
The biggest thing to watch out for, however, is any structural defect or issue that may cost you additional money once you have moved in. The most common are sticking windows and doors, cracks in plaster and brickwork and uneven floors.
Quality of build
Older buildings are generally defined as those that have been lived in at least once. Properties over 50 years old are usually pretty solid in their structure but may have some minor issues that need to be repaired. It’s still important to check everything from the top down. Start with the roof and look at what condition it is in. If there’s an attic, don’t be afraid to get up inside and have a look at the structure.
For those of you who are buying a flat, there are other considerations to bear in mind because these are usually bought as leaseholds. It’s important not to just consider the quality of the build but what potential costs may be down the line.
For example, if there needs to be renovation work carried out on the outside of the block or in communal areas, you will be asked to pay for some of that cost. That’s why it’s important to look at the entire block and not just the flat you are buying.
Pros and Cons of Buying an Older Build
As with new builds, there’s a lot to think about here when deciding whether buying an older property meets all your needs.
- The biggest advantage is that there is the extra choice with older properties and you are more likely to find a home in the place where you want to live.
- Mortgages and financing are more readily available with older build properties than they are for new builds which often have a few more stipulations attached.
- Many people think that older builds have a lot more character than new builds which are often mass-produced and built with speed and maximising profits in mind. For a start, older homes tend to have much bigger rooms and higher ceilings.
- On the downside, if you are a first-time buyer, you can’t access schemes such as Help to Buy which is specifically designed for new builds.
- An older property may require work on different areas once you move in (such as replacing an old kitchen or updating the double glazing and doors) that you don’t get with a new build. It’s important to budget for this.
Final Thoughts
Whether you opt for a new build or an old one, taking your time and doing your due diligence is always going to be important. If you found your dream property and want to buy it, the next step is to organise a mortgage. That’s where the team at Stirling Capital Group can help save you time and money.