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Should I buy a new build?

Buying a new build home can be extremely appealing.

After all, everything is new and pristine and new builds are often more energy efficient than older homes – meaning you’ll potentially save money on your bills, too.

But buying a new build involves a different process, particularly if you’re buying a property that hasn’t yet been built, and there’s a lot to consider.

“New Builds come with a lot of benefits including sustainable features that must be considered now,” says Rob Smith, CJ Hole’s Managing Director.

“In 2020 new build sales accounted for one in every eight properties sold across the UK and research shows new build properties are more likely to be energy and environmentally efficient, with 70% of new build owners valuing sustainable features in their properties. (Dataloft, HomeValue).”

In this guide, we explain the pros and cons of buying a new build, alongside the process you can expect to go through, and answer some common questions around new builds.

To explore our range of new developments, visit our land and new home page.

Is it better to buy a new build or old house?

Whether buying a new build or an older house is better will always come down to personal preference and there are both pros and cons to buying a new property:

Pros of buying a new build

1. Builder guarantees and warranties

New build properties come with warranties and developers must also sign up to a consumer code which is in place to protect buyers purchasing new homes.

The most common warranty issued is from the National House Building Council (NHBC), but the Local Authority Building Control (LABC) and Premier Guarantee are other warranties you may see if you buy a new build.

Most warranties last for 10 years, which means any structural issues must be rectified by the builder if they occur during years three to 10 of your ownership.

The first two years of ownership are covered by a defects insurance period, which means any problems with your property must be fixed by the developer.

2. Everything is new

New builds are hugely appealing to buyers as they’ve never been lived in and the property’s interior, fixtures, and fittings are all brand new.

If you buy off plan, meaning your property is yet to be built, you may also be able to choose some of the finishes in your property, meaning you can customise it to your own style.

3. Better energy efficiency

New builds are generally more energy efficient that older properties.

They’re constructed to the latest building regulation standards and data from Energy Performance Certificates (EPCs) shows that around 80% of new builds have an A or B energy rating.

This means your energy bills are likely to be lower if you buy a new build compared with an older home.

4. No upward chain

Because you’re buying a new home from a developer, you’ll have nobody above you in a chain and this can make your purchase much easier – even if you have a property to sell yourself.

5. Developer incentives

You may be able to benefit from various incentives offered by developers to quickly sell the homes they build.

Developer incentives sometimes include:

  • Paying or contributing to you stamp duty
  • Paying or contributing to your legal fees
  • Upgrading some of the fixtures and fittings in your home if you buy off plan

Cons of buying a new build

1. Build delays

Not all new build projects run to schedule and if you’re buying off plan, you may find competition of your new property is delayed.

This can be a problem if the delay means your property won’t be ready until after your mortgage offer expires, or if you are selling an existing property.

2. Build quality and snagging

Many new builds are handed over with minor problems, such as doors not opening properly or minor scuffs to paintwork.

These can all be pinpointed during your snagging survey and can be rectified by your developer.

Some new builds suffer with more serious build quality issues and this can cause added stress when dealing with the developer and getting the problems rectified.

3. Lack of space

Because new build homes are often built as part of larger estates, interior and exterior space can sometimes be less than older properties.

Gardens are often smaller, while bedroom sizes tend to be more compact than homes built many years ago.

4. Price premiums

Like a new car, new build homes can come with an asking price premium, before depreciating in value once you’ve moved in and your home is no longer ‘new’.

Over the long term, new build homes tend to follow other properties and the wider market when it comes to capital growth, but if you’re only planning to live in your new build for a short time, consider that its value may fall slightly.

5. Complex legal work

Solicitors often find conveyancing work for new builds is more complicated than for older homes.

New build properties are being registered with the Land Registry for the first time and this involves more conveyancing work, while issues around planning, build warranties, and road and sewer infrastructures are all issues which can add to the complexity.

Is buying a new build a good investment?

Over the long term, a new build property can be just as good an investment as any other home.

Although you may pay more for a new build property initially, and the property may depreciate in value early on, over the years a new home has the ability to grow in value in the same way older properties can.

Can you make an offer on a new build?

It’s a common misconception that you can’t make an offer on a new build home and the property’s asking price is the price you must pay.

In fact, you can make an offer on a new build in the same way you would any other property.

However, whether your offer is acceptable will depend on:

  • The level of demand from other buyers
  • How near to completion the development is
  • What other properties on the development are selling for

How to negotiate new build house price

When negotiating with a developer over the cost of a new build, you should consider:

1. Buyer demand and similar properties for sale

If you’re purchasing your new build in a market with high buyer demand, you may be less likely to succeed with an offer below the property’s asking price.

On the contrary, if buyer demand is low, or your developer still has many properties left to sell, or the property you’re interested in has been on the market for some time, you may be in a good position to negotiate.

2. When you’re looking to buy

Often, developers need to sell a certain number of properties off plan to boost their finances ahead of a further phase of development.

Buying during the early phases of a development can be a good time to negotiate and there are often deals available to buyers who commit to an off-plan purchase.

Buying during a developer’s year end can also be a good time to negotiate, as the developer may have to make some quick sales to reach their sales target for that year.

Search your developer’s company name on Companies House to find out their year-end date.

3. Ask about developer incentives

Even if your developer is unwilling to budge on a new build’s asking price, they may be prepared to offer an incentive to save you money elsewhere.

That could include contributing to or paying your stamp duty or legal fees, or upgrading elements of your property.

The new build buying process

While much of the process of buying a new build home is similar to purchasing an older property, there are things you’ll need to consider, particularly if you’re buying off plan.

1. Organise your finances

As with any property purchase, it’s important to get your financial situation in order before you commit to buying a new build.

That means:

  • Checking your credit score and fixing any errors
  • Getting a mortgage agreement in principle in place

2. Find your property

Your property search may start online, or with your local agent.

If you know the development you wish to explore, you could also contact the developer directly and arrange a viewing of either their show home, or the property you’re interested if it’s built.

If you’re buying off plan, you should be able to view a show home which will give you an idea of what you can expect when your property is built.

When buying off plan, be sure to ask the developer:

  • Exactly what’s included with your property and the spec of fixtures and fittings
  • What the schedule is for your build
  • To put a long-stop completion date in place – this is the date your builder must have completed your home

3. Offer and reservation fee

Once you’re confident you’re buying the right home for you, you can make an offer to the developer and negotiate over the asking price.

Once you’re offer is accepted, you’ll be asked to pay a reservation fee to secure the property, which should be deducted from the asking price when you complete your purchase.

4. Legal work and mortgage

You’ll need to engage a solicitor or conveyancer to complete the legal work on your new build purchase.

Your solicitor or conveyancer will liaise with your developer’s solicitor and your lender, as well as undertaking searches, planning, and services checks specific to a new build development.

5. Pay your deposit and exchange contracts

Your new build developer will look to exchange contracts with your solicitor as soon as possible, as at this point the sale becomes legally binding.

Unlike many older properties, you may exchange contracts with your developer months in advance of completion, particularly if you’re buying off plan.

When you exchange contracts, you’ll pay a 10% deposit (even if your overall deposit contribution is more).

6. Completion and snagging

Before you complete your purchase and move in, your developer should give you the chance to walk around your new home and pinpoint any issues, known as ‘snagging’.

Problems with decoration, or fixture and fitting defects are common snagging issues you may find.

Your new build warranty also means you have two years from the date of moving in to highlight further defects to your developer, which they should rectify.

New build mortgages

Some lenders will only offer mortgages on new build properties up to a certain value, sometimes a maximum of 75%-85% of the purchase price.

If you’re buying off plan, it’s important to ensure your developer puts in place a long-stop completion date, which should tie in with the length of time your mortgage offer is valid for.

Most mortgage offers are valid for six months, meaning you may have to apply for your mortgage again if your property isn’t ready before it expires.

Having a long-stop date in place means you may be entitled to compensation from your developer if they fail to complete your home in time.

Stamp duty on a new build home

Stamp duty for new build homes follows the same rules as older properties.

That means unless you’re a first-time buyer, you’ll pay stamp duty on any property costing more than £125,000, at the follow banded rates:

Portion of new build purchase price

Stamp duty rate

£0 - £125,000


£125,001 - £250,000


£250,001 - £925,000


£925,000 - £1.5m


£1.5m +


If you’re buying for the first time, you’ll be exempt from stamp duty on the first £300,000 of your property’s purchase price up to a maximum value of £500,000.

If you’re buying a new build to rent out or use as a second home, you’ll need to pay an additional 3% in stamp duty on each of the bands above.

How much value do new builds lose?

A study by the Financial Times suggested that new build homes can lose as much as 10% of their value in the first seven years after they’re purchased.

But many new builds either don’t lose value or quickly regain their value once they’ve been sold.

This can vary hugely depending on the popularity of a development and the performance of the wider property market.

Questions to ask when buying a new build house

When buying a new build, it’s important to get all the information you need from your developer so you can decide if a new home is right for you.

Questions you should ask when buying a new build include:

1. When will my property be completed?

If you decide to buy off plan, knowing when your property will be finished is key to arranging your mortgage.

Your developer should also put a long stop completion date in place, and this is when your property build should be completed.

2. Can we choose fixtures and fittings?

When buying off plan, you may be able to select certain fixtures and fittings for your new home.

Ask your developer if this is possible and if you can have a say on the finishes they choose, such as carpets, flooring, or kitchen worktops.

3. How many properties have you sold so far?

If your developer is building several other homes on a development, ask them how many properties have been sold so far.

Understanding the popularity of the other homes can give you an indication of buyer demand for the property you’re looking to buy and whether you’ll need to reserve it quickly.

4. Do you have plans to extend the development?

Ask your developer if there are plans to make the development larger.

Often large developments of homes are built in phases, so may appear smaller if you buy during an early phase.

Ask the developer to show you the plans for any future phases, so you can see how many other homes there will be.

5. How long is the defects insurance period?

Most build warranties have a two-year defects insurance period, during which time you can ask your developer to fix any issues with your new home.

However, check with the developer that this is the case as almost all new build properties have a few teething problems when they’re first built.

Further reading…

Looking for land or new build properties? Check out what we have for offer on our land and new homes page.

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