New Build is on the Up: Why New Build Property Might Be Your Next Best Investment

Complex as ever, the UK housing market is always evolving and like fashion, property ebbs and flows with new trends.

New build, thats what everyone is talking about, and it's been gaining more and more momentum in recent years. These modern, energy-efficient homes are becoming increasingly popular among investors, and for good reason. 

New Build Properties: A Rising Trend in the UK Housing Market

new build

Since the onset of the pandemic, buyer preferences have changed significantly. Many people are reassessing their living and working situations, with a growing number now working from home and no longer needing to commute into city centres. This has led to an increased demand for detached and semi-detached homes, which new build properties are well-equipped to cater to. Consequently, new build homes are experiencing a surge in popularity when compared to existing properties.

The UK government has introduced several measures to encourage investment in new build properties, including the Help to Buy loan scheme, which is only available for new build homes. This scheme is set to end in March next year, so you may be looking to take advantage of this before the deadline. Additionally, the government has announced a cut in VAT for materials needed for energy-efficient measures, such as insulation and solar panels, and a £5,000 grant scheme for those replacing an old boiler with a heat pump. These initiatives are further boosting the new build appeal.

The Advantages of Investing in New Build Properties

One of the primary reasons new build properties are gaining traction among investors is their energy efficiency. These homes are generally far more energy efficient than their older counterparts, which means lower gas and electricity bills for occupants. With the cost of living crisis and soaring energy bills dominating headlines, the energy efficiency of new build properties is a major draw for potential tenants and buyers.

New build properties typically come with lower maintenance costs than older homes, as they incorporate modern construction techniques and materials. This means investors can expect fewer issues and repair costs, making new build properties an attractive long-term investment option.

For investors looking to rent out their new build properties, the customisation options available can be an enticing selling point for potential tenants. The ability to create a bespoke living space tailored to individual needs and preferences increases the appeal of new build properties and can help to attract high-quality, long-term tenants.

The Role of Mortgage Providers in the Rise of New Build Properties

Mortgage lenders may be more willing to lend to buyers investing in new build homes, as these properties are often seen as less risky than older homes. This is because new builds typically come with a new home warranty, such as the National House-Building Council (NHBC) warranty, which covers homeowners if anything goes wrong. As a result, mortgage providers may regard new build properties as lower risk investments, making them more accessible to investors.

The Impressive Yields on New Build Properties

Recent research from Hamptons has highlighted that yields on new build flats can be even more impressive than new build houses, with the averages for a flat being about 7.1% compared to the 6% on houses. This is an important consideration for investors looking to maximise their returns in the UK housing market.

The Relationship Between New Build Properties and Energy Efficiency Legislation

The UK government is considering introducing legislation that would require privately rented homes to have an EPC rating of C or higher by 2025. With 96% of new build homes falling into EPC bands A-C, investing in new build properties would mean investors wouldn't need to pay for improvement costs to meet these requirements. Additionally, maintenance and running costs are likely to be lower for new build homes, further enhancing their investment appeal.

The Impact of Construction Costs on New Build Prices

The cost of construction materials has been at a record high in recent years, with supply issues also affecting the price of new build properties. However, this has not deterred investors, as the numerous advantages of new build properties continue to outweigh the potentially higher initial costs. And with our extensive connection to off plan developments, this isn't something to get too bogged down about. 

The Significance of Location in New Build Investments

The location of your new build investment is crucial in determining its success. It's essential to consider factors such as local amenities, transport links, and the overall desirability of the area when selecting a new build property to invest in. Partnering with Gladfish can help you to navigate these complexities surrounding the UK housing market and allow you to make informed decisions about new build investments.

The Future is New Build

As the UK housing market continues to evolve, new build properties are likely to remain an attractive investment option for those looking to capitalise on the growing demand for energy-efficient, modern homes. With the potential for impressive yields, lower maintenance costs, and customisation options, new build properties offer investors a strong, future-proof investment opportunity in the UK housing market. With the help of our expert team at Gladfish you can make more informed decisions about your investment portfolio and ensure that you reap the rewards of new build property. If this interests you, reach out to the team to find out more about our new build developments. 



Brett Alegre-wood
June 1, 2023

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