To wonder why new builds are so overpriced?

[chickenlittle2020]

Been browsing properties as wife and I are hoping to get on the property ladder within the next few months. We've looked at new builds using help to buy and the government equity loan. They just seem so overpriced! For example, this property - no proper garden, not much space, little character on for £629K. Its so overpriced for similar older houses on the market.

www.barratthomes.co.uk/new-homes/united-kingdom/h749401-new-mill-quarter/plot-447/

Anyone shed some light on this madness???

New properties, particularly flats, are like new cars. Cost a bit too much when they are new and shiney and depreciate quickly into normal house price within a couple of years.

The other thing I don’t like about new builds is that you don’t get to see what kind of neighbourhood you are moving into until most houses are sold.

Images include optional upgrades at additional cost

Nice.

I dunno. I sort of assumed it would turn out to be luxuriously spacious inside but it looks pretty pokey.

They're priced at the level people are willing to pay. People will pay over the odds for a brand new property for the reassurance that everything will be functioning and designed to suit them and with a warranty.

Schemes like help to buy etc have also inflated the prices.

Some people like new builds, and those people are prepared to pay a premium.

No idea about that particular development. But remember you are usually getting all brand new white goods, new flooring, new kitchens and bathrooms, lots of bathrooms, new boiler, no general maintenance for a while, properly insulated (should be anyway), no chain. There’s lots to attract people even if the plots and building size isn’t everyone’s cup of tea.

Bloody hell. I thought the newbuilds here were expensive. You could get a 4 bed detached with garage for about 250k where I live.

They are subsidized by the tax payer via help to buy and various other government prop up schemes to keep house prices high, so builders can charge more for a new build house as they know people will have more money available to them from various schemes which then gets first time buyers into more debt than someone 10 or even 20 years ago for the same style house.

Completely agree. And they're so poorly built. We went to buy a 10yr old one and there were holes in the ceiling where the nails on the plasterboard were coming back out. Staircase had moved at least an inch away from the wall and it was frickin tiny! Garage was too small to fit a car. And the streets are so narrow they're a nightmare to navigate.

We got a 3 bed detached for 185k it was on at 190k but 185k was accepted. Got a lot in which isnt standard, small local developer

Some assertions made here are not true.

My new build house is much cheaper than the other 4 bed housing stock available in my area, central London. I know the neighbourhood extremely well. It is not shoddily built or poky. I think you need assess where you buy on certain criteria and then be open minded about what suits you best. Plus new builds are v environmentally friendly - warm and well insulated so costs of running are lower than I paid in former Victorian terrace flat.

no general maintenance for a while

Erm, that used to be years ago, these days you can be hit with bills to change the roof when you realise the tiles are stuck with grey tape, among another 399 things.

Think it’s because they expect you to barter them down .
We were all set for a 4 bed that was 750k and got a good 60k off and some extras but they were a fucking nightmare to deal with (Catalyst) so we backed out and have now bought a 5 bed , 10 year old house with a massive garden for much less .
Keep in mind they’ll probably push back the completion date a few times too if it’s one not finished yet .

How much 😱😱😱😱.

I mean, you do pay a bit more for a new build as a lot of the time it's personalised to your tastes - my dad moved into one four years ago and could choose all his carpets, the kitchen and bathroom, and various other details that you wouldn't get control over in an older home.

They will lower in price once they're second hand.

But you're paying a lot for the area, too. My dad's was only a 2-bed but it does have a front and back garden, and was only £150k. It's still expensive for the area, but nothing like what you're talking about. With the amount of money you have there, I could buy 5 rental properties and retire for life.

Round here new builds are seen as very desirable and a bit posh. We're trying to buy atm and whenever you raise the subject people will instantly start talking about which new development still has homes going. I currently live in a 300 year old terraced cottage which I love and which I'd buy in a shot if the owners will allow it, but it definitely wouldn't have the snob value of a nice detached build with its own 80cm of garden all round and a living room that's 10 foot by 9.

That property looks awful. I agree OP, totally overpriced. And Hackbridge is horrible.

They're not expecting you to pay list price. We offered £30k less (about 15%) and they threw in flooring. The house had increased by £60k when we came to remortgage the HtB loan after 5 years so we had to pay back a bit more than borrowed, but at 60% loan to value the new mortgage is cheap. It worked out really well for us.

Fuck me. Where I live that would cost you £160-180k tops. Property prices in/around London absolutely blow my mind. I’ll stick with the shire!!

Do salaries in London really offset the bonkers property prices? It’s something I’ve always wondered...

I bought a new build and like you I felt they were over priced. The help to buy scheme gave 40000 towards the house which meant I could get a house 40000 over what I could afford in terms of mortgage. Even after factoring in the over price of the home this still meant I could get a better house . Also you don't pay back the 100% it deflates or inflates depending on market which put my mind st ease somewhat.

They’re massively overpriced where I live, you can get a decent three bed semi with parking for two cars for around 200k here, two bed new build terraced houses with no front garden, one parking space and not enough room to swing a cat in start at 235k, they’re basically an empty shell with very basic kitchens, bathrooms and doors, no flooring, turf etc. Once you’ve added the bare minimum of extras you’re looking at closer to 250k.

Its madness to me as they’re so so tiny, even factoring in being more energy efficient and lower maintenance costs I’m struggling to see how they’re worth the money.

Our house is worth around 200k and to buy a comparably sized new build in the exact same area we would be looking at around 300k+ easily.

I don't get it either. A couple sprung up round the corner recently, ordinary 4 beds but with tiny gardens. £900k!! (Not in London). Other bigger houses with bigger gardens going for £6-700ish). I don't get it at all.

New builds are for some, but never will be for me.

Tiny gardens, all look the same. No imagination from architects. Build them and they will come I suppose.

But hey each to their own. Are they subject to A ratings for insulation and all that etc, etc. That would be worth considering! Maybe...

Bought a new build for 180k in 2017, it has just sold for 220k and another had sold for similar before lockdown, maybe depends on the developer and the area.

They're expensive because of a variety of reasons:

1. The land where the house was built is probably more expensive than in other places. It means more money is spent on resources. This is case for London and South East.
2. Demand - a lot of people are unable to get onto housing ladder until really later on and are wanting to buy forever homes.
3. Help-to-buy fuels demand as well.
4. Housebuilders need to make profits.

Probably main reason why there are more shoddy homes nowadays is because there isn't enough people being trained from school in trades. We've pushed too many people into academic courses, there are shortages of bricklayers etc. A lot of tradesmen are due to retire or have in recent years.

I'd recommend looking for a house pre global recession, if you do want quality newish built homes.

@IfIHadAHeart

Do salaries in London really offset the bonkers property prices? It’s something I’ve always wondered...

lol no they don’t. I live in London, I’m in my 30s and literally all of my friends of a similar age are sharing flats with friends