New build bargains - property

May 2, 2011 - PRLog -- First-time buyers would be wise to seek out new-build homes because their prices are decreasing faster than other types of home.

The attraction of a new property is obvious, but there are potential problems that have to be understood.

Firstly, the new build industry is struggling as it tries to sell properties it has erected during the crisis.

It requires sales for cash-flow purposes as other means of raising finance – such as bank loans – are drying up.

This means buyers have more bargaining power and can knock the price down quite considerably.

Getting a mortgage is of primary importance and with no forward chain with a new build there is less chance of the deal falling through.

Costs can really stack up when deals collapse with hidden charges cropping up all over the place.

Other advantages of a new build include cheap running costs. Because everything is new, they buildings tend to be more efficient.

Indeed, if you organise the sale prior to the home being built, you can have a say in its design – particularly of fixtures, fittings and decoration.

New build homes also include a ten-year warranty from the National House Building Council (NHBC), or other insurers.

However, new build homes can have small rooms, thin walls and little storage space.

There are almost always problems associated with them – little things that can become hugely annoying. They are known as snags.

Thomas Moran, partner at law firm Speechly Bircham, said: “I always insist that there is specific provision for snagging.

“Reputable developers do this anyway, but there are all sorts in the market, some big, some small, so you need a contractual promise than within, say, a year they will come back to remedy any minor defects in the finishing.”

Figures have also shown that owners of one in ten new build homes new build homes on brownfield sites report problems.

Melanie Bien, of independent mortgage broker Private Finance said: “The new-build sector has been hit hard since the downturn.

“Values of new-build properties have fallen harder and faster than older homes, which has meant many lenders are nursing losses due to overinflated valuations.”

Max Erskine from remortgagenow.co said: “New build homes of course are often designed for first time buyers.

“They are cheap to runs and should need no extra work after the buyers move in.

”Many I have seen have small rooms and thin walls. There is often only a tiny garden and little storage.

”Few if any have garages so it is worth being aware of all these things.

“A good estate agent can knock the price down and together with good mortgage advice first time buyers can get on the property ladder in a new build home.”
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