If you’re in the market for a new property and are considering a newbuild home, it pays to know as much as possible about the market before you buy – especially as the government is trying to get more new houses and flats constructed to meet demand.
Read on for a brief overview of the sector and what buyers need to consider before making a purchase.
The stats
Much of the research conducted into the newbuild market in recent years has focused on the shortage of housing that has resulted from developers failing to keep up with demand, giving rise to statistics including:
• Around 100,000 new homes are built in Britain each year – but 230,000 new households are created every year
• 2024 saw an 11 per cent fall in annual housing starts in England compared with the previous year
• Completions in England rose by just one per cent last year compared with 2024
As such, buyers need to be quick off the mark if they’re serious about purchasing a newbuild.
First-time buyers
Research indicates that first-time buyers (FTBs) with financial support are aged 29 on average, rising to 33 for those without help. This growing difficulty for FTBs to secure a place on the property ladder makes newbuilds all the more appealing to them, as the government has launched a number of schemes designed to make it easier for buyers to secure the finance they need to make their first purchase.
These include:
• First Buy – The purchaser meets at least 80 per cent of the cost of the home through a mortgage/deposit, with the rest being fulfilled by the government and developer through an equity loan.
• Shared ownership – The buyer purchases between 25 and 75 per cent of the property and pays rent on the remainder.
• NewBuy – Set up especially for newbuilds, this scheme lets buyers make a purchase with a five per cent deposit, which is lower than the typical deposit required by mortgage lenders.
The properties
Newbuild properties are constructed to strict standards covering everything from energy efficiency to security – so buyers can rest assured that their home is well-insulated and protected through measures such as metal railings and gates where required.
Much of newbuilds’ appeal also lies in the fact that they provide a blank canvas decor-wise; while buyers can negotiate with the developer to get certain things like carpets and window dressings included, they’ll usually have a nice, clean slate to work from when painting and wallpapering.
Of course, there’s also the advantage that there’s no chain to worry about – so, as long as the property has already been finished, buyers could be in their new home very quickly.
How newbuilds are sold
Usually, the buyer will deal directly with the developer when purchasing a newbuild. They need to successfully reserve a property before appointing a solicitor and arranging a mortgage. This may involve waiting for the reservation to be approved by managers at the developer before proceeding.
The rest of the process is similar to that for a standard house purchase – once the mortgage has been approved, the buyer should inform the developer and let their solicitor get on with making enquiries. Once they’re happy with everything, contracts can be signed and exchanged and a moving in date can be confirmed.
One issue that can crop up with newbuilds is defects that are spotted after the buyer has moved in. Many developers have some sort of warranty scheme in place to deal with such problems, meaning the owner can arrange to have the necessary repairs done by the developer without incurring any additional costs.