Is it better to buy a new build or an older property and does it affect your mortgage process? Both good questions and both worth spending a little time thinking about. So, let’s look at the benefits of both options as well as what it could mean for your mortgage application.
Whether you go new or old is sometimes down to what fits your circumstances. Factors such as specific location requirements or local schools, can mean that there may be limited options. As an example, village locations and inner cities, tend to be limited on new properties, where some smaller towns seem to be overflowing with new builds. For most of us though, we have the choice of new or old property.
The Benefits of Buying a New (or fairly new) Home.
- Energy Efficiency
Usually, a new home will be more energy efficient and that could mean lower monthly bills. Better insulation, modern energy efficient windows and better heating, ventilation and air conditioning (HVAC) means a better year round living climate. Smart heating, solar panels, heat pumps and low energy lighting could also all be options when it comes to bringing down the bills.
- Less Maintenance
There is a lot to be said for a new build when it comes to what they call a turnkey solution. You turn the key, walk in, and everything is ready to go. Fresh paint, new kitchens and pristine carpets are a big bonus for many buyers. Also, for a totally new build, you will have a range of options.
A new build is easy and worry free, also there is no hunting for screwdrivers or planning Sunday projects for a while.
- Warranties and Insurance
Most homes under 10 years will still be covered by the NHBC warranty or similar guarantee of quality. That means any problems that come up with the build should be covered, albeit on a sliding scale over time. Home insurance premiums can sometimes be lower for newer properties because of their fire resistant materials, better plumbing, pre-installed security and so on.
What About a New Home Mortgage?
So, shiny and new has a lot going for it when it comes to the actual house but what about mortgages? Well, buying a new-build home offers several benefits when it comes to securing a mortgage. First, there are often specific mortgage options available for new builds that make them more accessible for buyers. We can help you with this, so talk to us about what there is on the market. Additionally, newer homes may qualify for government-backed schemes, such as Help to Buy, allowing buyers to secure a mortgage with a lower deposit or at a more favourable rate. However, these do tend to change, so always get advice. While the paperwork for a mortgage tends to be pretty standard in terms of your income and so on, the home details are often more readily available for a new home, making the move in process and sometimes the mortgage approval, a little faster and easier.
Benefits of Buying an Older Property
While there are many advantages to buying a new home, that doesn’t mean you should discard an older property out of hand. The older home also has many advantages and features that a new one simply cannot match.
- Often More (or less) Space and Mature Gardens
The design of newer houses tends to be very focused on the use of space in a utilitarian way. Kitchen/Diners, 3rd bedroom/office space and so on are common. However, older homes come in a range of sizes and layouts. For example, many properties from the 50s and 60s came with long gardens that will have now matured. Older properties will often have dining rooms rather than larger spaces with dining areas. Cellars and attic space may have been converted into rooms and garages and outbuildings are common. Similarly, smaller builds such as cottages may make for more compact homes.
- Features, Charm and They Don’t Build ‘Em Like They Used To
One of the differences between the older property and the new one is the charm they acquire with age. Many houses have features and unique characteristics such as, wooden floors, stained glass windows, courtyard gardens, high ceilings and so on. The criticism often levelled at new homes of course is that they lack the individuality of an older house. Building materials, techniques, design and construction have all changed over the years, which adds to the charm.
- They May Have Been Improved (and you can DIY)
It’s not uncommon for older homes to have been renovated and improved through the years to provide an individual living space. A new build will also not necessarily be more efficient. There have been many schemes to improve energy efficiency in older builds in recent years. While that ‘turnkey’ option of a new build has its advantages, you may want to channel your inner Bob the Builder to personalise your home or even go the ‘fixer upper’ route to save money initially. Speaking of which…
- You could get more for your money
Older homes, as a general rule, tend to be more affordable than similar new-build properties at the moment. According to data from the UK House Price Index (HPI), as of mid-2023, the average price of a new-build home was approximately £392,000, compared to around £290,000 for an older, existing property. That ‘turnkey’ option is nice, but it can be more expensive compared to an older home.
- The local community may be more developed
A more mature, well-established neighbourhood often means local parks and green spaces, community activities, a strong sense of community, and proximity to local shops, schools, and pubs/restaurants. You won’t have to wait years for landscaping to grow in or for new businesses to pop up around you—everything’s already in place.
What About a Old Home Mortgage?
Just as a reminder, there is really no difference in terms of basic requirements around affordability and your financial situation when it comes to an older property. However, some of the deals for new builds will clearly not be available. That said, there are other options that could well be just as good and, as we already mentioned, older properties tend to be lower in cost or offer more for your money. Older properties may require repairs or refurbishments though. Again, this often isn’t an issue, in fact you can ask lenders to factor these potential costs into the mortgage. Lenders may well request a detailed survey to assess the property’s condition, which could delay the process or even lead to higher interest rates if significant issues are discovered. Despite these challenges, the mortgage process for older homes can sometimes be quicker than a total new build as there are fewer complications related to construction timelines or valuation uncertainty.
The choice to go for old or new is not quite as simple as it first seems. That said, the final measure, the one factor that will probably be the tipping point when you are making the decision, is this. Once the practicalities are out of the way, when you know you can afford the mortgage and you are ready to make the decision, ask yourself this. Can you see yourself living there? Do you see yourself coming home, turning the key in the front door and walking into your home? If you do, and everything else stacks up, then it’s probably the right house for you.
Whether you are looking for a fresh painted new build or a charming older built house, call us and let’s chat about finding the right mortgage to put you into that dream home.