Take advantage of rising property prices by using a government-backed scheme to buy a highly desirable new-build home in the right location…
The government has pledged £7bn to house-building with the aim of creating 400,000 new homes.
The benefits of buying a new-build home include a 10-year NHBC guarantee and the likelihood that it will be far less costly to maintain than a period property, says London Bridge estate agent Williams Lynch.
But with property values rising 12.4% in London and 6.4% in the rest of the UK in 2015, according to official figures from the Land Registry, here are 8 ways to reduce the cost of purchasing a new-build property and ensure the home you buy will increase in value.
1 First isn’t always best
Try to avoid being the first owner of a new-build home. If possible, wait until the development is five, or even 10, years old. That will mean you avoid paying the premium often charged by developers and you can make a good assessment of what effect the housing scheme has had on the area. This is particularly important if you are buying a property that is part of a large housing scheme.
2 Take advantage of government help
If you have set your heart on being the owner of a brand new home, use the government’s Help To Buy scheme to reduce the cost of your borrowing. The London-only Help To Buy scheme provides buyers who have a 5% deposit with a loan of up to 40% of the value of the home, interest-free for five years.
After the five-year interest-free period ends, borrowers will be charged interest at 1.75% of the loan’s value. This fee will increase every year at 1% above inflation.
3 Pick the right location…
The old adage of location, location, location applies to new-build property as much as a period home. A new property in a good location is most likely to retain value. When viewing your new-build home, take care to look at transport links and other local amenities, such as schools, supermarkets and green space.
4 …And a desirable unit
One of the reasons property values are increasing is because desirable homes are in short supply. If your new-build flat is one of many hundreds of identical properties in the area its future value could suffer because buyers will have a wide choice of properties.
5 Check the guarantee
Before you put down a deposit on a new-build home, check that the National House-Building Council’s 10-year Buildmark guarantee is in place. If it is not, your property is not covered if the developer fails to complete the building work.
The Buildmark also gives you 10 years insurance against any issues arising from faults during building.
6 Look at the layout
While the new kitchen, modern bathroom and real-wood flooring may be attractive, look beyond fashionable finishes and design. A good layout, natural light, outside space are plus points that will never go out of fashion.
When viewing the property for the first time, use the compass on your mobile phone to check which way the property faces. West Hampstead estate agent, Paramount Properties says south-facing windows can improve the energy efficiency of a home because solar energy warms the walls and floors of a building. North facing windows, on the other hand, offer a more consistent quality of light.
7 Get the measure of your new home
Show apartments often include subtly reduced sized furniture (a three-quarter rather than a full-size double bed, for example), mirrors and minimal storage to make them look bigger, warns Marble Arch estate agent Plaza Estates. This is why it’s wise to take a tape measure with you during viewings and study floorplans carefully.
8 Request a full survey
Just because the property is part of a new-build development doesn’t mean it will be free from structural problems.