We hear the home buying process is stressful, challenging, difficult and yet, once the pitfalls and hoops are navigated, almost universally we hear of the joy and freedom they feel at reaching an important life goal of owning a home. No pain, no gain as the expression goes but the desire to reduce the difficulty of buying appears to be an increasing focus of many new buyers.
This is leading many first time buyers to see new build properties as more appealing to second-hand properties. A brand-new home is an attractive prospect; a blank canvas to fill with new memories, less need for renovation and repair, and potentially a more straightforward buying process.
Aldermore’s latest First Time Buyer Index shows new build becoming an increasingly appealing option for first-time buyers for reasons you’d expect and for some you wouldn’t.
Overall, the findings show new build has broad popularity among this generation of first-time buyers. 48% are looking at new builds exclusively for their first home and a further 28% are open to it as a property preference. Within this, 62% of new build home hunters are interested in purchasing a house while 34% would prefer a flat.
Cost-savings appear to be the main allure of new build, with first-time buyers citing the lack of need for renovations, the general high specifications so less maintenance, pre-installed fixtures like washing machines helping reduce decorating costs, and cheaper energy bills due to higher energy efficiency being the most compelling reasons for the preference.
First time home hunters also foresee a smoother home buying process as it opens up more options for mortgages due to the Help to Buy scheme and the lack of chains means it can be much quicker. This leads to less cost from delays or risk of a property sale falling through. Our research shows first time buyers had an average cost of £3,976 from purchases falling through and an average of £4,417 from additional costs due to delays caused by Covid-19. This means if budgets are tight then a lot of money can be saved through a smooth, quick home buying process which New Build properties can potentially provide.
With a first time buyer spending an average of £7,425 in the first year of homeownership furnishing and decorating the property, having fewer renovations and more energy efficiency will ensure a less expensive first year.
Buying new build properties are not without concerns among new buyers, however. The main issues first-time buyers cite are mainly focused on the building's quality. Nearly two in five would be concerned with defects from poor building quality, the disruption to living caused by construction continuing at the development post-moving in, and costs of high ground rent/service charges.
There has been a continual debate within the industry on whether new build will keep its appeal beyond the Help to Buy scheme ending, with some commentators fearing a drop off in the demand. The research would suggest new build hold a range of compelling reasons for their consideration far beyond financing and that first-time buyers remain attracted to their convenience and simpler home buying process.
