New-build or an established property? How to make the decision

Pad of paper and a pen

The best way to work out where you want to live and what you want to live in is by doing a bit of personal analysis - involving all the other decision-makers, of course, in addition to anyone whose opinion you trust.

Just as you would identify the critical points for the environs of your next home - proximity of amenities and public transport, good local schools, entertainment spots like restaurants, cinemas and pubs, types of shop within walking or short driving distance and so on - you should also consider what is absolutely essential for the house or flat for you to live happily in, right down to things that you can compromise on. And include the garden, front and back, in that. And a driveway and outside structures like garden sheds. Everything can trigger an importance in someone.

This will provide you with a tick list when looking at the variety of properties any estate agent will be sending you - it will also help you to define your needs to the agent so that they can mould the choice to your preferences.

Next, you need to consider whether an existing property can match your key requirements, or if a new-build property is a better fit to your needs.

What to consider when looking to buy a new-build

There are certainly more of these properties available. The Conservatives 2019 Election Manifesto promised that they would oversee the construction of 300,000 new houses every year until 2025. This has been updated and adjusted in May 2023, but the essential point is made - for those who can afford them, they are available, including straightforward homes and social housing.

The following points are some that you might wish to consider when opting for a new-build:

Chains - when you're buying a place from someone who's currently living in it, there will almost certainly be a chain of people who are also buying and selling. The longer the chain, the more complex and potentially lengthy the process will be. When you are buying a new-build or developing your own home on a plot of land, there are likely to be no chains at all.

* How important is the lowered complexity and increased speed to your needs?

Space - because builders will endeavour to cram as many properties as the can into the space on which they're building, they will generally sacrifice the space found in the buildings' rooms inside when compared with an existing property. You might also notice that the typical garden is smaller than a comparable property built a number of years ago.

* How important is the need for rooms to be a certain size, or can you make the potentially smaller sizes work for you?

Finance - some mortgage lenders will be concerned about providing loans to purchase a new-build property because of the state of the equity left to you. Builders will try to sell the home at a premium and, just like a car as soon as it is driven off the forecourt, there is instant depreciation in value as soon as you have purchased it. 

* Will the overall cost of a new-build and your plans to live in it mean that you'll be struggling with money, and can you live with that position?

Blank canvas - when you buy a new-build, especially if you've managed to negotiate the inclusion of extras like carpets, white goods, wooden floors, tiling or even paint colours, the space is ready to move into and use without too much work, if any, required beforehand. Most likely there will be no decorating required, no immediate maintenance, and no DIY jobs in the offing, whereas an older building will almost certainly need to be updated and upgraded in some way, as well as needing some level of maintenance. 

* How handy are you or those you are planning to share the space with when it comes to decorating and DIY? Do you find the idea of not having to decorate or do any remedial work a relief?

Household utility bills - because of the stringent building regulations applied to new-build properties (and also extensions to existing buildings), the state of insulation is going to be of a high level, while  the Energy Performance Certificate will be graded towards A as a consequence. This means that the energy required to heat the house and heat water is going to be lower than an older house and therefore results in lower energy bills in comparison with many older properties.

* Would you be prepared to upgrade an existing older home to reduce the costs of energy use, or would you prefer to have had that all done for you already?

Warranties - a builder will guarantee their work, assuming they are a quality outfit (which is something you might want to research with the help of the NHBC (the National House Building Council) or other protective organisation), and this will usually last for a period of ten years. With an older property, notwithstanding any agreements reached following a survey, you are essentially buying the property as is, which means managing anything that becomes faulty after completion.

* Would having knowledge of a warranty to deal with any building problems give you greater peace of mind?

Snags - you move into your new-build and begin noticing a few things that niggle or simply don't work. For example, a door scrapes along the floor, windows are difficult to open, a tap is hard to turn on, the toilet doesn't flush satisfactorily, plaster is cracking, and so on. These irritations are what constitute a ‘snag list'. You could save them up for one hit when calling the builder back to fix them, or highlight them as they occur. Either way, they are niggles that can take the sheen off the pleasure of moving into your own home.

* Are you prepared for the inevitable reality of dealing with these types of problems on an ongoing basis, especially if the builder is still on the estate constructing more properties, so will likely be busy focused on that work?

Incentives and financial help - when you are looking at a new-build property for buying, there are some schemes that might be available to you. For instance, it's worth investigating the incentives a builder might be offering to get you to buy the home (e.g. paying the Stamp Duty or offering part-exchange if you are planning to sell another property to help finance this one). The government also has a number of initiatives at any time, such as the First Homes Scheme or the Mortgage Guarantee Scheme - but you'll need to check the availability and eligibility details.

* Do you want to do a lot of legwork and homework research to find out all the possibilities? Or would you rather go for the ‘safer' option of buying an older property with a mortgage?

Property previews - Building companies will produce beautiful brochures designed to show a glossy picture of what the property will look like once it is built. Because of the greater demand for housing than current supply, many buyers feel obliged to put down a deposit on the plot without having the opportunity of visiting and viewing the finished product. Of course, this also means you may be in a position to influence some of the internal layout, even directing some decoration decisions so that it really will feel like your home when you move in.

* Are you prepared to take the potential risk of disappointment that the glossy pictures don't quite match reality? Are you also prepared to keep a dialogue going with the builder to see how progress is going? 

Complexity of conveyancing - perhaps counter-intuitively, the legal side of buying a new-build is often more complex than the more apparently straightforward buy-sell chain of existing properties. The conveyancing covers all manner of establishment issues from the searches to the legal ownership transfer. And, beware! Some builders will insist that you use their recommended conveyancer rather than your own choice - this should be avoided at all costs because the conveyancer, appointed by the builder in the first instance, will have the builder's interest as their primary concern.

* Are you worried about whether you'll get decent representation for the legal aspects of the purchase?