Buying a new build - what to consider
The housing market has been in the doldrums since the onset of the recession, and with mortgage lenders tightening their criteria, many have found moving up the ladder, or getting that first important step onto it, a near impossible feat.
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However, with Nick Clegg pledging to give the housebuilding industry a boost by unblocking stalled projects, nearly 50,000 new homes could begin springing up in 2013.
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So if you are in the market for a new home, a new build could be the way to go. We check out the pros and cons of buying a brand new property.
The benefits
Where an old building will almost certainly come with the odd quirk and possible problems, new-build properties offer a low-maintenance alternative.
Modern building regulations mean that new homes must meet certain standards of energy efficiency, so you will have no worries about poor insulation or drafty sash windows, as double-glazing will come as standard. That means cheaper running costs throughout the year.
Similar regulations apply to safety and security, giving buyers the reassurance of fire doors, smoke alarms, and often security locks, burglar alarms and security lighting.
A new-build also comes chain-free, which can take the stress out of moving, while the neutral decor allows buyers to quickly put their own stamp on the property, or relax without having to redecorate in a hurry.
Many housebuilders also offer incentives to entice buyers to part with their cash. Stamp duty paid, part of the deposit paid, cash back, or freebies like white goods, carpets and curtains are often provided. Buy off-plan and you could even get to choose various fixtures and fittings.
Finally, the majority of new homes come with a 10-year warranty for a little extra peace of mind.
The pitfalls
While a new-build property might seem like an issue-free choice, they are not without their pitfalls. Sadly, a survey by consumer watchdog Which? in 2011 found that more than half of new-build purchases were blighted by problems.
The glossy brochure might present an alluring image, but new-build homes are renowned for their small rooms, plasterboard walls that do little in terms of soundproofing, and are often seriously lacking in storage space. The fact that many new-builds sit on former brownfield sites can also sometimes be a problem, with some having to deal issues such as flooding, poor drainage and sewage problems.
Buyers should also be prepared for 'snagging', meaning minor errors, defects and repairs that become apparent once the property is built. Most builders will include a provision for fixing these problems, but getting them to fulfil their promise can be an arduous task.
But perhaps the biggest obstacle is financing. Buying before the property has been completed could lead to problems with your mortgage lender if the completion date is delayed, since most mortgage offers are only valid for a six-month period. It is worth trying for a 'long stop' completion date that will make the housebuilder liable to pay you compensation if work is not complete by an agreed date.
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Since maximum loan-to-values (LTVs) are typically lower for new-build homes, lenders often won't lend more than 85 per cent of the property, and in some cases you may only get a mortgage for 65 to 75 per cent of the value, particularly if you are buying a flat.
Last but not least, be aware that extras like fixtures and fittings, and even little things like coat hooks, are often not included in the tempting price, so it's essential to factor these things in before you take the plunge.
What advice would you give buyers planning on getting onto the market with a new-build property? Leave your comments below...
