New Builds

[jacks09]

Very open question and very keen to hear different views.

My situation

Getting married and will start trying for a baby in the next couple of weeks. Both are in decent jobs and have paid for the wedding ourselves. All the money spent on that will now start to be saved monthly meaning within a year we could get a decent deposit together to fulfil our aim of buying a house. We are currently renting.

What to buy

We aim to move out of London to be closer to our families - most likely on the commuter belt but anywhere from Kent, Sussex or Surrey. Our dream is a country pad with lots of space but this will prove difficult for our first home. Looking around at the different help to buy schemes available I have noticed 2 things. The help to buy ISA is good, but limits you to a property of under ?250k outside of London and we are in a position to spend a little more. The Equity loan scheme would allow us to buy a bigger house and sooner too but limits us to new builds. Fully apprecaite that this needs to be paid back but would aim to do this within the 5 years so as not to incur interest.

Does anyone have experience of buying new builds? Any known pitfalls?

Are they like new cars in that they lose a % of value as soon as you move in?

Would we expect new builds to become cheaper as the companies have taken a hit on the stock market? Does this make them more appealing?

Any insight appreciated - quite daunting as a first time buyer anyway but made harder with the current uncertainty in general.

[AbDabs]

With older properties it's probably easier to see any likely problems and not be fooled by new plaster/paint but it depends whether you are practical people or not. New builds should come with a guarantee though (if it's signed off) and that's why they have a small premium. I wouldn't hope for a reduction on price because of the share price drop (if anything, reduced borrowing for future projects may mean the lack of supply pushes the price up further). I'd always be worried about buying a new build that's had the price reduced (is there another reason for a quick sale?)

If you're having children then a shiny new house (no DIY/dust) may make things easier but remember that children grow up and want to kick a ball - older properties outside London tend to have more space.

New builds come in various shapes and sizes but the typical modern estate has less opportunity to extend (no empty loft space, or too shallow) when your family gets bigger.

I don't have personal experience of buying new build but friends who did (and didn't get anyone else to check it over first) were shocked at how cramped it was when they moved their stuff in. Beware the show home room layouts with reduced sized furniture! If you look at an empty property it will look even bigger. Take a tape measure and check the actual dimensions yourself.

[Lazero]

Agree that the hit they are taking won't directly decrease their asking prices. They will simply build less (for now) and sit on the land they already own, therefore re=balancing supply for the market. Their asking prices are much more driven by the market more generally (I often found they tried to charge a slight premium to equivalent properties locally).

I've looked at new builds a fair bit, and my parents almost went for a new build last year. The company behind it makes a big difference. You have to go out and look at their work in person. I found huge variances in quality (fixtures, size of rooms, how solid walls and floors are). Some were awful, and some were consistently great (Telford, the Berkeley Group, Taylor Wimpey had some good ones). This is obviously reflected in prices.

For your other questions - you still need to know the local market (including non new builds) as that's the only way you'll really know if their asking prices are crazy. They don't lose value immediately after you own it, assuming the original price was commensurate with local stock. There can be some benefits if you buy off plan, like choosing the kitchen or colours or floors, but agree that you need to be able to picture your unit well as show homes can be idealised.

In the end I didn't buy a new build, but only because I was selling so I couldn't afford to put up with an estimated completion date 12-24 months from putting down a deposit! The range was too wide, but it sounds like this isn't an issue for you.

If you find a good company, and a good area, it can be a great buy. For places outside of London - look carefully at the local area and whether infrastructure is there. My parents looked at a development they liked, but it was a company building an entire community from scratch (literally nothing for miles around, the developer was planning to build a supermarket, school and so forth). They weren't comfortable with this - what if it didn't all work straight away? If it's just a few new houses within an existing community I personally think that's better.