From cheaper bills and lower-day-to day running costs, to various buying schemes available, if you’re buying a new-build you could save yourself some serious cash. Old properties are popular choices for many due to their rustic charm and original features, however with this can come poor energy efficiency, problematic features and generally more high maintenance and expensive upkeep required.
The trend for buying new-build homes has been growing, and between December 2020-November 2021, 243,780 new homes were built in England, which is an increase of 13% compared to the previous year.
So, let’s look at 8 reasons how buying a new-build could be good for your bank balance long-term and save energy:
More than 80% of new-builds have an energy efficiency rating of A or B on their EPC (Energy Performance Certificate), which means not only are they eco-friendly, but also less costly to heat and maintain. This is an impressive figure considering only 4% of older properties have an EPC rating at this level.
Not only do new-builds often have modern energy-efficient appliances and heating, but they also have double or sometimes triple glazing, solar panels, insulation and condensing boilers. Research by the Home Builders Federation found that new-build home owners can save approximately £2,600 a year in energy costs. These kinds of savings, plus knowing that you’re helping out the planet with a smaller carbon footprint, are not to be underestimated!
- Save money on repairs with new-build warranties
In the UK there’s various home warranty bodies, including NHBC, Premier Guarantee, LABC Warranty and Checkmate, which give protection and rights to anyone buying a new-build. The Consumer Code for Home Builders (CCHB) ensures that buyers are fully informed about the property before and after they sign the contract to buy it.
The cover is for 10 years and provides insurance for any major repairs or problems which could arise from how your home has been built, protecting you from any nasty financial surprises in the future.
Find out more about what the CCHB means for your rights as a buyer.
- Tailored to your taste
Another advantage of buying a brand new home is that usually you can choose to tailor your property to your taste from the very beginning. This means you can choose where to position your fixtures and fittings or what colour kitchen worktops you fancy!
Due to the fact you can customise some of these options from the beginning, this means you may not spend as much money on decorating or redecorating further down the line, than if you were buying an older property.
- Less costly house repairs
Generally it’s safe to assume that with a spanking new-build home, it’s unlikely you’ll have to fork out for many costly repairs, especially in the first few years. This low level of maintenance is a great advantage of buying a new build, whereas in older properties unfortunately you could encounter many problems which have a hefty price tag to repair.
- Cheaper surveys
When you buy a new property, usually you’ll organise a survey to assess its condition and make you aware of any potential problems. Depending on which survey you go for, they can be a costly commission, ranging between £400-£1500 on average.
However, if you’re buying a brand new house, you may decide that a survey isn’t necessary, or perhaps just a ‘snagging survey’, which is a simple cheaper option usually about £300. This will identify any minor issues, such as doors or windows that don’t shut properly or chipped worktops for example.
- New white goods means lower maintenance costs
When you move into a new-build, all of the appliances or ‘white goods’ will be brand new and usually the latest models, including dishwashers, fridges, freezers etc. This means they should last you longer and be less likely to break down and need repairing, at least for the immediate future. Make sure you ask the developer to give you their guarantees!
- Cheaper insurance
New-build homes have higher levels of security than older properties, generally speaking, which can result in your insurance being less costly. Some developments will have a gated entrance, concierge services and CCTV, whilst many new build houses are fitted with burglar alarms.
Keep in mind that although your new build will come with a warranty, this will only cover issues specifically related to the building work carried out by the developer.
Therefore it’s still sensible to take out buildings insurance to cover the structure of your home plus any permanent fixtures and fittings, in addition to contents insurance to cover the cost of repairing or replacing your belongings if they’re stolen or damaged.
- Available buying schemes
There are various buying schemes available to help you purchase a new-build home including:
- Deposit Unlock
This is a relatively new scheme launched by the house-building industry to enable you to buy a new-build home with just a 5% deposit. The way it works is that when you purchase the property, the building developer pays a percentage of the price into an insurance policy for your mortgage provider. This reduces the risk of lending for your mortgage provider, and enables you to benefit from a lower interest rate too.
Although the scheme is open to everyone looking to buy a new–build home in the UK to use as their main residence, it’s not available for studios or one-bedroom flats, and the developer you’re buying from must be taking part in the scheme.
Find out more about Deposit Unlock HERE
- Shared Ownership
This is a government scheme which enables first-time buyers to purchase a portion of the enquiry in a property if they can’t afford to take out a mortgage for the total value of the home. You’ll co-own the property with a housing association who will charge you rent for their portion of the house, and it’s applicable for new builds, existing properties, houses or flats. Due to the fact you’ll only own part of the property, you won’t need as big a deposit or mortgage.
However there are a few disadvantages to consider. Firstly, when selling up you won’t have as much freedom and your housing association will get a set period of time to find a buyer. This means you may end up selling for a less high price, or you may have to sell it back to the housing association instead of putting it on the market.
Secondly, as there aren’t as many lenders offering shared ownership mortgages compared to standard ones, there isn’t a huge amount of competition to offer decent rates so you may end up with a slightly higher interest rate.
Find out more about the shared ownership scheme HERE
- Help to Build
In 2022 the government unveiled its Help to Build scheme to first-time buyers, which enables you to build your own home with just a 5% deposit. It works by the government giving you an equity loan based on the estimated costs to buy the plot of land and build your home. The loan amount can be between 5-20%, and up to 40% in London.
However, this may seem like a no brainer for some but there are some important things to consider. Finding the right land for you to buy and build on can be trickier than you might think, and you’ll have to organise planning permission which can be a timely element, plus secure a mortgage.
Additionally, building costs for a whole house are hard to accurately estimate, and they can often be much more expensive than you think which means you could go over budget and end up spending more than you initially planned.
We hope this blog has given you some food for thought if you’re considering buying a new build property, and if you’d like any further advice about moving home get in touch today to speak to one of our friendly Home Mover Advisors.