In recent weeks I’ve noticed a new trend in the housing market regarding the popularity of new-build homes. But why are new build homes becoming more popular? Let’s take a look.
We’ve had the so-called race for space as people moved to larger homes, and we’ve seen more demand for property in rural and suburban areas than in city centres.
If you’re looking for a mortgage to buy a new build home we can help with that.
The stats behind the trend
Figures from the house building industry show that around one in every 10 homes purchased in 2021 was new-build – a higher figure than in recent years. And data from a leading estate agency shows that over a third of those new home purchases were ‘off-plan’ so were paid for, and committed to, before they were even built.
What’s more, the big majority of those off-plan purchases were for detached, semi-detached and terraced houses for families. This is a reversal of past trends, where most off-plan sales were flats being purchased by buy to let investors to rent out.
Why the move towards new build homes?
There’s been such a shortage of stock on sale in the past year that some people will have chosen completely new homes just because they had few alternatives. However, there’s growing evidence that many positively want to buy new – it’s not just a second-best option.
There have always been plus-points like a 10 year warranty with most new homes, lower maintenance costs and usually better wi-fi and wiring. Plus, if you buy off-plan, you often get the chance to have a say on fixtures and fittings too.
But there’s an additional reason, and one that is growing increasingly important in these difficult economic times.
Energy efficiency to the fore
Another new set of figures – this time from a leading insurance firm – makes it clear buyers are increasingly motivated by energy efficiency, especially as domestic fuel bills sky-rocket.
Some 40 per cent of buyers now say energy efficiency is a serious consideration in their choice of a home. This is double the rate just two years ago. Around half of buyers want high quality roof and wall insulation. And a quarter even want an electric car charger too.
Of course all of these things can, in theory, be retro-fitted to older homes. However, they can prove expensive and cumbersome. Especially in period houses and in conservation areas. Which I believe is why many people are looking towards brand new homes.
The easiest way of judging energy efficiency is by assessing the Energy Performance Certificate (EPCs) ratings that every house must have before being sold. Many people are looking for an explanation of how EPCs work.
A key point for me is that over 80 per cent of new build homes constructed since 2017 have the top EPC ratings of A or B. By contrast of the older housing stock, only 2.2 per cent are A or B. Over 80 per cent are D or worse.
With better EPC ratings, buyers of new homes are often able to access the new generation of ‘green mortgages’ with preferential rates for properties with strong energy efficient credentials.
A balanced picture
We shouldn’t be blind to the occasional disadvantages of new homes, of course.
Some are small, they sometimes carry a hefty premium when you buy, there are likely to be low-level snagging issues. If they are on estate or private complex there will be additional service charges. Although these are now subject to government scrutiny.
The buying process for a new build is also a little different to existing homes.
But I anticipate that new-builds will become a more common choice for buyers from now on. Driven primarily by the desire for a more sustainable and cost-efficient alternative.
We’ll always love characterful but draughty older homes. Perhaps it’s time to give some affection to new homes too – especially if they prove kinder to the planet.
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Last Updated: July 19th, 2023
