Why New Builds Aren’t Worth The Money.

by | Sep 27, 2018 | Blog, Property Investment

This week I worked with The Sun on their article House About That The areas of Britain with the most newly-build homes since 2010revealed.

It’s a celebration of the fact that some areas of the country are building A LOT of properties and how a £72 billion construction boom has happened in the last twenty years.

It’s absolutely brilliant that there are so many new homes going up, because we all know how wide the divide is getting between demand and supply, but are they actually that good value for money?

As someone who has lived in a new build in Putney for the last few years, you would think I am on the yes vote. Yet, it’s a NO from me.

New builds are actually terrible value for money:

  1. The developer has to achieve a certain amount of money so that they can repay their investors and also make a profit
  2. They are selling the lifestyle, so of course they are going to make it look spectacular so you would be willing to pay over and above the normal asking price
  3. They are usually leasehold so have an expiry date on the lease… there will also be service charges which seem to grow exponentially over a few number of years
  4. They have a small floor plate so that the developer can fit more properties onto the land
  5. There will be a shared ownership quota on them, 25% of an overpriced property all of a sudden doesn’t seem that expensive to a purchaser. This distorts the market

Where new builds are involved, I would actually advise renting. **SHOCK** seriously, I think you get better value for money in new builds, especially on flats, if you rent rather than buy. You don’t have to pay the service charge, they are usually in super central areas, but not your forever home. You get hotel living on your terms. Once you are done with it, you can move out, not worrying about escalating prices and a freeholder who will try and hold you over a barrel for sales fees.

If you are looking for a good investment:

Buy second-hand property. You’ve got bargaining power. Negotiate low, renovate, sell high.

Don’t subject yourself to being cornered, by locking yourself into an overpriced property. Buy old and turn it into your new.

Do you agree with me or will you always buy new builds, comment below?

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Natasha