Daily Mail: New build house prices boomed 17% last year while older homes dipped

[KievLoverTwo]

I'm glad someone is finally covering this. When I did a bit of independent research on a few areas and downloaded land registry data for new builds versus non new builds, the difference between the two (and sizeable falls in costs of new build sales over the last two years) was quite amazing. It definitely skews the reliability of 'house prices in Boroughbridge rose 6% in the last year' type of thing you see on places like Rightmove. I've given you an example area that's chocced full of new builds - in fact, Rightmove is saying the opposite! Now what's happening is dozens of them are trying to sell their secondhand newbuilds and hardly anyone's buying them, which is quite sad really. It's an okayish area.

I'm not looking for a bun fight (done enough fighting elsewhere this week, teehee), just to share the article, on which you can make up your own minds :)

https://www.thisismoney.co.uk/money/mortgageshome/article-13271345/New-build-house-prices-boomed-17-year-older-homes-stayed-flat-map-shows-price-gap-area.html

That is certainly something we are finding in our attempts to sell our house.

Really sorry to hear this. There are so many new build buyers out there that are stuck with now unaffordable mortgages because the houses cost so much to buy in the first place. Makes me sad. On doing a brief inspection of a few areas I also noticed that some house builders (small, local ones) have dropped their prices so that they're only 10k more than the second-hand new builds that people are selling, only you also get a 10 year NHBA guarantee if you spend 10k more. They're kinda screwing everyone.

I hope you get lots of viewers and an offer in the Spring.

Help to buy chickens coming home to roost. It always was a terrible policy.

No one can shift re-sale recent new builds where we live. You can buy new for less. The listings even try and hide that they aren’t brand new with evasive wording.

I wouldn’t want either.

It does make sense that over a relativly short period of time - the price of materials, labour and services increased dramatically. So as a consequence the cost to a buyer of a new house built has also increased by a similar margin. Unfortunately that extra cost doesn’t translate in to the house being worth more than a second hand house, the day after it is bought. In fact the opposite happens generally.

As you rightly point out it means that a lot of the people who bought, or are buying them, are going to be stuck with a loss if they need or choose to sell - for possibly a good number of years. It has historically been the case that people accept the premium of a new build with the view that they paid a bit more but that values will quickly catch up. In the current scenario though the time taken for the house to be worth what they paid for it is accelerating away from them. That, for some, may be an unexpected issue.

The point about how the initial price of new builds increasing is masking the fall of propert prices overall is a very valid one. It will become more evident over the next year or so as developers are reducing the numbers they complete and have started to struggle to sell at the inflated prices.

Indeed it was a toxic scheme for almost everyone involved EXCEPT the developers. Who did rather well.

Second hand new builds are notoriously difficult to sell anyway.

Yes but the gap between what you paid and what the house is worth is becoming much larger than it has been in previous years.

The much higher cost of renovation/maintenance/materials must be a factor in this - no-one wants a house that needs work doing to it any more.
My DH is always exclaiming how expensive wood is these days for example.

New homes are so poorly built and with poor quality materials, I wouldn't touch one with a barge pole.

In fact I wouldn't buy anything newer than 1970s

I think one of the biggest cons at the moment with new builds is the number that are not true freehold and are unadopted. Requiring management companies and extra fees to maintain the estate. Buyers really are being fleeced left and right.

This is why I cannot understand why anyone buys a new build. Yes, you might be getting today’s shiny new toy, but it’ll be tomorrow’s hard to shift property that looks dated compared to the latest releases. Well-maintained period properties have much more reliable prices and you know if they’ve lasted 100+ years they’re not about to spring forth new problems.

That article is completely bogus. You can’t infer much at all from that data, as it doesn’t cover housing mix. For all you know, developers could have been building large houses, whilst most of the second hand homes are flats. In which case, of course new builds will be expensive…

Given that Help to Buy is capped at £600k, there was probably a push by developers to target that end of the market, which gives you that spike.

Either way, without more granularity in that data you can’t make any serious conclusions at all - and I expected most of the posters on this board to have slightly more nous than to be taken in by the headline!

Lack of cupboards is always my bug bear with new builds. My 1930s flat has 3 massive built in cupboards.

For some people it was the only way onto the property ladder. Not sure why this is so hard to understand. We bought in lockdown. Minimum deposit requirements went up so we opted for newbuild. Got a really low rate for 5 years and have been overpaying. Not our forever home but cheaper than renting. Second hand houses selling fine where I am even with huge price increases; I guess this isn't the norm

''@DrySherry
I think one of the biggest cons at the moment with new builds is the number that are not true freehold and are unadopted. Requiring management companies and extra fees to maintain the estate. Buyers really are being fleeced left and right.''

Absolutely.

I bought last year and looked into a couple of new built small houses but I was put off by the fact that I had to pay management fees. They are unregulated so they can charge whatever they want. Wen I did my research on one of the development where I had found a potential house, I found out that some of the owners and shared-owners were already taking legal action against the company so I did not go for that.

I had a new built flat before that and it was not built well. One of my neighbour even the roof leak into their bedroom which should not be happening for such a new building. We had a high service charge because constant maintenance is needed which was odd in such a new construction.

I did buy an older house in the end but that can also have issues has it is expensive to update and requires regular maintenance and of course tradesmen costs are high but on the whole I like my house and I know that new built are no guarantee of having a problem-free home.

"For some people it was the only way onto the property ladder. Not sure why this is so hard to understand"

I think that generally people do understand this situation and also sympathise. You are one of the lucky ones that got a good rate when they were lower and you have had the foresight to overpay. Well done and you should be fine. Later buyers at high rates and overinflated prices are the ones who are going to have, or are already having, a more difficult time. Especially if they max out and don't have capacity to overpay as you have.

Okay, but the majority of new builds are not for people only just getting on the property ladder. Which is clearly behind the thrust of my post, rather than an ability to understand 🙄

The only people I’ve known to buy new-builds were first time buyers. Especially with the incentives, plus you can often negotiate stamp. I don’t know anyone else who has bought one.

I'm.less worried about a person wanting to buy a new home than I am.those buying shared ownership.

Shared ownership you get stung for a percentage of the full.price with, I would imagine, no chance of negotiating price or extras. These are young working people simply trying to get a secure home on their pay.

As others have already said, its because they had a captured market who could only buy a house in that particular way, hence the higher prices which then cant be replicated on re sale because they were so inflated

So its not that 'new build prices have gone up and older properties have dipped', yes on paper, but not in reality because its just a scam in a way.

Interesting debate, also much discussed in our circles due to the next generation of friends/ family/ acquaintances buying new builds.
I think it would be helpful if posters stated the country that they are posting from.
Although a lot of the world is experiencing inflation and disruption of their economic and financial climate, other factors such as housing shortages (U.K.) vary a lot with eg USA, who also post here.

It's presumably because you don't need to refurbish new build and refurbishment costs are now very high.

One set of builders will be doing better than the refurb and rent crowd. There is a lot of property on the market with refurb cost of 50k plus. That is not attractive if you have higher mortgage rates.

Totally. I've seen so many horror stories over the last year on this matter. Building new build houses and selling them as leasehold is a money-grabbing d*ck move that does nothing except line the pockets of massive corporations who can put fees up to whatever they want, whenever they want.

Which often leaves people unable to sell.