Do new builds lose value?

[pomadas87]

We are considering looking for a new build property - we could get a lovely looking 3 bed house with garden for the same price as our period 1-bed flat it seems!
However, DH seems to think we want one that has already had one owner, and not be the property's very first owners as new builds decrease in value initially. Is this true? We would probably be there about 5 years.

Is the estate complete? A new, new-build might be more attractive to some just for the newness (couldn't be arsed with the snagging, myself! ) so they'd pay more for it than a used new-build, but if the estate is complete and there are no more new to buy, used will increase in value (assuming the estate is attractive.)

I had read that this is true but I can't remember where. Google might be your friend here for stars

in many cases, yes. Those who want a new build want just that. A second hand one will be at the point where the speed-builder shortcuts start to show, and will appeal neither to those who want new builds nor those who want solid older properties.

New estates in my area have second hand houses listed for less than the original price. Not saying it happens in all cases, that's just my experience of the property market. You pay a premium for living in a brand new house (same as buying a brand new car).

It depends on the area. If prices are still rising, the new house price will rise too. It’s all about desirability and location. In some areas new builds are desirable and sell well 5 years down the line but the desirability of the town, whether you are near a station and whether there is a shortage of houses all comes into play. Houses on estates may well not keep their value but select new builds certainly can.

Yes, you definitely pay a premium for a new-build. Your husband is sensible.

Your DH is right. In my area you pay a premium for new builds and quite often they are sold on for a loss if sold on soon after purchase.

Often the earlier phases of a building site are slightly cheaper and as the site starts to sell and later phases are marketed at a higher price , if it's a desirable development the the value of the earlier phases usually go up in value to match the later phases ....

That only works in a rising market, joffery. In London, there is quite a lot of discounting going on behind the scenes.

When we bought our house 18m ago, we were told we needed a 15% deposit for a new build vs 10% for a normal house, as you pay a premium for a new build and therefore they're not guaranteed to hold their value and are higher risk for the mortgage company.

Only if they are eligible for help to buy. Help to buy slightly inflates the price. If there is on going building in the development/very near by this will also effect the price by provide a lot of very attractive competition. I wouldn't let it put you off though. We bought a new build and sold it a couple of years later for a small increase (enough to cover stamp duty and cost of moving our stuff). We are about to buy another one.

Yes in my experience. We sold our newbuild for £50k less than we paid for it (after 5 years). However other houses on the estate lost up to 100k so it could actually have been worse! The house was also very shoddily built with very many plumbing and electrical problems and everything was plastic and basically rubbish (despite costing 400k to buy). This was in a desirable location BTW. Wouldn't touch another one with a bargepole.

We purchased our new build for £165k three years ago, it was recently valued at £190k.

So guess it depends on area

I agree it totally depends on the area. My newbuild isn't worth the bricks it was built with but next door went for £50k more than it was bought for.

It takes all sorts I guess!

I've been advised that with a brand new build you usually lose money for the first 2 years, then it goes up/down as per any other house.
We are currently interested in a new build and this is what we've been told. As long as you don't plan to move within 2 years then all is fine!

We bought a new build 2 years ago, Only 2 sold since but both went for about 2-3k over the price the original owner paid.

We paid around 12k for flooring, glass internal doors and upgraded kitchen. Worth it to me as staying a while but I wouldn't expect to get that back. Didn't include the bathroom tiling or vanity units I wanted as too expensive (they have to tile a small amount but don't make it like the show home). Then had to buy turf and fence for back garden. I think these are the costs you loose.

I do love it though, family homes so lots of people ar a similar stage in life so plenty of kids out playing. Nobody knew each other so kids all became friends really quickly.

We've recently had our house valued and it has increased in value since we bought it new 2 years ago. But it's a desirable area and a small estate.

In my area prices on new builds have gone up along with older houses, they also seem to be holding their prices in the sense they're more expensive than a comparable in size/area older house.
However I'm not sure this will stay the same in the coming years if prices drop so overall I think it depends how long you plan on spending there. If you'll be there years and you love the house why not, if it's short term or you don't love the house it's a risk.

Yes but then you are paying for new carpets, brand new appliances all in guarantee, shiny new bathrooms, fresh paint, brand new boiler/heating system etc.

When you buy an older house you often have to replace some of these things when you move in. Can be thousands!.

Also other reasons quoted above.

However it is nice to move into somewhere brand new and have to do nothing!

We bought our new build for £235k in 2014. It was valued at £280k in April but we are struggling to sell it for £250k at the moment despite our area generally increasing in value. We aren't on a big estate, only 1 row of new houses on an existing road but some newer smaller, less attractive houses are being built behind us and on for the same price.

Totally dependent on the area and the developer. We bought 3 years ago from a small developer whose finish and build quality was exceptionally good. We've made £30k in three years just for living here. National housebuilder 10 miles down the road can't get people to buy to finish the development, need £20k for extras (kitchen!?!) and the first houses on that estate are on for 75% of the original cost.

Do your homework on the builder and look at empty new builds, not just the showhome so you really understand what you're buying.

Good builder and a good location, would be fine. Our new build has a fair amount of snags but we have 3 very very modern bathrooms, a lovely kitchen and solid wood flooring. If you were refurbishing would probably cost you 34k for a 3 bed 3 bath to get it to the same standard.

We are also a 10 min walk to the main city train station to London and to the City Centre.

Thanks all. When you mention snagging, what sort of problems does this entail with a 'new' new build?