A new wave of buyers could be interested for the first time in buying a new-build home, prompted by the Help to Buy scheme. But will they pay, literally, too high a price?
The scheme kicked in this week, and will offer government-backed shared equity mortgages to buyers of new homes only, to both first-time and home movers.
Purchasers using the scheme will only have to put down 5% deposits on new homes costing up to £600,000.
The Government (ie, us, the taxpayers) will put up 20%, meaning that buyers will be able to get a 75% mortgage. The equity loan is repayable on the sale of the property, or at any other time.
It is possible that agents may well find themselves having conversations with applicants about the scheme – and the merits and drawbacks of buying a new home.
According to a new Barratt survey, the chief attractions of a new home are that it is low on the hassle factor – in other words, low on maintenance, high on energy performance, and its structure is guaranteed.
The new homes industry is extremely good at promoting itself, perhaps in a way that the used homes market, despite its various membership bodies, is not.
But as every agent knows, there are both pros and cons to older homes – and to new homes.
Chartered surveyor Nick Evans reckons that some of the disadvantages attached to the latter include a 25% price premium, energy efficiency that isn’t quite what it’s cracked up to be, and guarantees that should be looked at carefully.
His thoughts were written for consumers, not for agents, so bear this in mind when you read his blog. It’s interesting stuff – and could provide independent back-up to some of your arguments.
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