Congratulations! You are now about to a new property – what’s a greater milestone in your life than that?
Whether this is your first property procurement you are making or a second, there are certain things you may wish to consider when investing in a newly constructed vicinity.
First thing’s first, what is a new-build property?
You are a smart cookie. You have probably already denoted from the name itself that it is a completely new estate that has been built and never been occupied by any individual before. Sure, some properties that have been previously inhabited for a short period of time by certain people and have been described as “new-build” properties. With three hundred thousand new homes entering the market by the end of the year, it is a great time to get up to speed with the market and study the process of purchasing an asset of this nature.
Why invest in a newly built home?
There are countless advantages in allocating your hard earned money towards investing in a newly built property. First and foremost: the maintenance required, and its associated costs will be significantly low as compared to an older property. The quality of construction, technical strength and heating as well as electrical structure will be much stronger due to constant innovations in construction technology. The heating and energy monthly invoices you will receive will be lower in sum as well due to the newly efficient boilers and heating systems installed. You will also save some money on Industry leading boiler insurance as the premiums may be lower in cost. Another property class you may wish to contemplate buying is an off-plan property. These have not been built as yet and will give you the flexibility to make some design changes as per your desires.
An additional factor to motivate you to invest in newly constructed homes is that you can obtain some governmental aid in the form of finance to help you buy the property in question. The government will loan you a specific proportion of the sale price of the property. Interestingly, this scheme is only accessible to those who wish to buy a brand new home.
What will you get in your newly built home?
You will receive mostly fixtures and fittings within the sale price itself. Just keep in mind that offerings differ from developer to developer. Variables like kitchen furnishings, dishwashers, flooring, washing machines and carpets may not be included. Sure, smart developers may try to cross sell such items to you but charge an arm and a leg. So be certain about other viable fiscal alternatives and do your homework by surveying the market for such items and their relevant costs if you invested in them yourself. The good news is that modern building regulations require developers to adhere to stated criteria – so your energy bills will definitely be optimised and lower in cost as compared to a figure you’d receive in a property that was constructed a decade ago. You should not be surprised if your newly built home has double or triple glazed windows, insulated walls, roofs, doors and such. These are common features in contemporary property construction.
Can you negotiate your price?
You may not be at the flea market where you bargain to your heart’s content – but, you do not have to pay the full price you are told upfront. You need to negotiate and find a balanced amount that works for both you and the seller. Depending on the location, local demand and what stage of construction the property is at – you should be able to get a good deal.
You never know, you could get lucky! For instance, if the property you are looking at with interest is within its early phases of being built and the developer needs cash – then you could get quite a few thousand pounds knocked off the original asking price. On the other hand, if the home is nearing its full construction and no potential buyer has been found yet except you – that puts you in a good bargaining position too. Always be willing to pay what you perceive as equitable value for the said property. And never ever pay more than what it is worth in the current market. If you think the real estate bubble is about to burst, then hold off and wait for the prices to fall. You do not want to be in negative equity – this is an unpleasant situation where you owe more on your mortgage terms than the actual sale worth of your newly built home.
If your developer is a bit stubborn and does not budge from his asking price – there are other perks you can try for. These range from getting him to pay for the stamp duty or add in some furniture and flooring.
What is a new-build premium?
Ever heard of this phrase? Sure you have! It indicates that these newly built properties are more expensive as compared to similar but older constructed units. It makes sense though right for it to exist? Everything is brand new! All features and amenities have never been utilised, energy-efficient and state of the art. Again, make sure that you do your homework before investing in these gorgeous new babies. Just survey the market and make sure that you are not being overcharged by your selling developer. Some of them have been said to mis-state prices for those buyers who are wanting to take advantage of the governmental aid scheme.
Getting a mortgage for a newly built home can surprisingly be difficult sometimes. They may put a lending cap and only loan up to eighty-five percent of the total sale price to you. Some mortgage lending institutions may even go down to only seventy-five percent. Another variable that you may have to deal with is the timing involved. Mortgage offers tend to be valid for a period of six months – but it is possible that your property may take longer to actually be built and habitable. A fair and just mortgage broker may be the one to guide you in this process and find you the best deal possible.