'New build' is a term used to refer to properties that have never been lived in before. It usually refers to properties built by developers, but can also be used to mean homes built by individuals (also know as: 'self builds').
After someone moves into a new build home it's technically becomes 'second hand'. However, there are some significant differences between owning and selling a property that you bought as a 'new build', and owning and selling a 'second hand' property.
In this article we'll take a look at what makes new builds different, and how you can increase the value of your property and get the best price when you sell.
In order to make an informed decision about how to improve the value of your new build home, it's important to find out how much it's currently worth.
To figure out how much a house is worth, you have to take into account a variety of factors. These include:
How long have you lived in the property? Are you still within the National House Building Council warranty period? Have you kept the property well-maintained, or done any renovations?
Your home's unique features can also have an impact on how valuable it is. Do you have a south facing garden? Do you have integrated smart appliances? Things like these can add value because they make your house more appealing to potential buyers.
Unfortunately, not all of the things that impact the value of your home are within your control. How well the property market is doing can also be key. To get a sense of what's going on, think about the following questions: are there lots of people interested in buying a home in your area? How many other properties are on the market? What price are they selling for? (Or, check out our real-time data on your area here.)[https://www.getagent.co.uk/house-prices]
If you're interested in the value of your home because you're looking to sell, it's also useful to consider how much you paid for it originally.
The best way to do this is to compare the price you originally paid, with 'second hand' properties on the market. Compare both price, and size to get a sense of how your property compares.
If you're unsure, talk to an estate agent. They will be able to provide the most accurate estimate of how much your property would sell for if you put it up for sale right now.
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Curious about how much your home is worth? Try out this free, online valuation tool. It uses information about your property & the market in your area, to give you an estimate of how much your home is worth right now. Try it now.
If you haven't lived in your new build very long, you may find that your home is now worth less than you bought it for.
This is because new builds are usually sold at a premium price to reflect the fact that no one else has lived in it before. New builds are also generally built to a specific high standard, meaning they are more energy efficient (and therefore cheaper to run) than older homes.
According to the Land Registry, in December 2020, new build properties in the UK sold for an average of £297,104. Previously owned properties sold for £247,203 - almost £50,000 less.
In order to recoup this cost, you'll either need to:
Before getting out your toolbox, or picking up your paintbrush, take a moment to think about your end goal. Why do you want to add value to your property? Are you looking to sell now? Or, are you hoping to future-proof your property?
If you're looking to sell soon, focus on value-boosting upgrades that improve the wow factor and kerb appeal of your home. But, remember, return on investment is key: there's no point spending thousands of pounds on large upgrades like a loft conversion, if you're not going to make the money back.
Luckily, you're unlikely to have any large structural issues with a recently built property. This means you have much more control over how much you decide to spend on property upgrades.
If you do have any structural issues, and you bought your property off a developer (rather than building it yourself), make sure to report these before the end of your warranty period. This will usually be around 2 years after completion. If your claim is upheld, the developer or builder will then be required to rectify the issue within a certain time frame.
When it comes to adding value to a property that you're about to sell the key is to spend less money than you'll get back when you sell. This can be a tricky balance, but there are a few easy places to start:
This might seem very obvious, but the first thing you should do is fix any issues with the property. This could be large things (like a leak), or smaller things (like a broken tile or a door that sticks in its frame). It can be useful to have a friend or estate agent look round your home first and let you know what stands out. Often the smaller issues are things you'll no longer even think about, but will stick in the mind of a potential buyer as another extra cost. Research has shown that people tend to overestimate how much things will cost to repair, and will offer less for properties that they think need work. Fixing as much as you can is a cost effective way to make sure you get the best price.
New build properties - particularly those built in the past 5 years - tend to be smaller than their older counterparts. Having lots of things out on show suggests to potential buyers that you have limited storage space. Decluttering is an easy way to make the space look bigger and lighter.
Go one step further, and invest in improving your storage situation. Adding shelves is a cost effective way to make use of any 'dead' space, or consider getting a shed for the garden. Common places to add storage include: either side of a chimney breast, shelves under the stairs, or simply adding a bookshelf along a section of unused wall space.
Just as people are attracted to new builds because they have never been lived in before, buyers find homes that are well looked after the most appealing. Estimates suggest a clean home can add up to 5% on the amount potential buyers offer.
A nice garden, balcony, or other outdoor space can massively improve the value of a property. Research by property portal Rightmove found that access to a garden was a priority for over 60% of buyers looking for a new home.
If you have an outdoor space, take the time to show it off for potential buyers. To get the most value out of the space we'd recommend staging it like you would any other room in your house. Make sure the space is clean and well-maintained, then add features like seating or plants. This will help buyers imagine how they could use the space themselves.
Remember: Every house has what's called a 'ceiling value'. This is the maximum price a buyer will spend on a house before they would be more likely to purchase something 'better'. Usually this means something bigger, with more land attached, or in a more desirable location.
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It can often be tempting to make big upgrades to a property before you sell in the hope that it'll encourage higher offers from buyers. However, there is always a risk that you'll end up spending more on renovations than you gain in value.
Renovating new builds also comes with additional considerations.
If you bought your new build home from a developer or house builder in the last 10 years it's likely that it's still covered by the National House Building Council (NHBC) warranty. This warranty is essentially an insurance policy that covers new build home owners against any problems with the builder's work.
Unfortunately this policy won't cover anything that's done to the property by anyone other than the builder, or that 'exceeds the original specification for the home'. Therefore doing large-scale renovations during the policy period (usually 10 years), you may end up invalidating the warranty, making it more difficult to claim if issues with the builder's work do arise.
This doesn't mean it isn't worth making some upgrades in order to boost the value of your property. Small things, like refreshing the paint, or updating dated fixtures can have a big impact on the attractiveness of your property.
Large scale renovations like a loft conversion, basement conversion, or an extension, are great if you need extra space. However, conversions and extensions can cost thousands of pounds, and be incredibly disruptive during the build process. You may also need to apply for planning permission. It's therefore unlikely that you'll see a good return on investment if you do these upgrades just before you sell.
It's pretty common that potential sellers are told that a new kitchen will add value to their home. In reality, however, a new kitchen rarely pays for itself. Many buyers will want to tailor a kitchen to their own tastes, and although a well-maintained and attractive kitchen can make a home more appealing, it's unlikely to add enough value to your home to make a full-scale kitchen redo worth it. To give your kitchen a cheaper refresh, consider repainting your cupboards, or updating individual appliances.
Tip: If you do decide to make some larger changes, consider your target audience. Is your property more likely to attract young professionals, or families? Or is it more suitable for those downsizing in retirement? Use this information to guide your home improvements. For example, young professionals are more likely to find a home office more appealing than an extra bedroom. Those later in life might prefer a downstairs bathroom to extra living space in the loft.
Even though your property isn't technically still a 'new build' once you've lived in it, there are some particular issues that impact this type of property, and should be taken into consideration if you decide to sell.
If you buy a new build property (rather than self-building), it's quite likely that it'll be a leasehold. This means that you are effectively 'renting' the land from the freeholder for a set amount of time (usually between 99 and 999 years).
Unfortunately there are a number of issues that can come as part of owning a leasehold, which can make it more difficult to sell. These include: unfair ground rent clauses, and high service charges. Some buyers will be put off if your contract includes a term that allows the freeholder to increase these charges over time.
Luckily if you apply to renew your lease, these terms can be removed. This can, however, be very expensive. Weigh up the potential increase in value, with the amount you'll need to spend to extend your lease.
There's also been a lot of discussion recently about the impact of the cladding scandal on those that own new build properties. Many new build flats have safe cladding, but until they are tested - and have a certificate demonstrating their safety - many mortgage lenders are reluctant to lend to those who want to buy them. Because of this, if your flat is impacted, you may find it difficult to attract buyers that need a mortgage.
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