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If you’re looking to buy an apartment in Manchester, now could be a good time. There’s certainly no shortage of choice and the Manchester property market is booming, having reported its busiest ever start to a new year this January.
Perhaps you’ve been renting for a while and are now ready to buy your own place, or maybe you’ve decided to invest in a buy-to-let flat. But whether you’re a first-time buyer or already own property, one of the first questions you’ll be faced with is also one of the most important: Is a new-build development a better buy than resale property?
Spoiler alert – there’s no easy answer to this. Both types of property have their pros and cons and the right choice will ultimately depend on your specific requirements and personal preferences. With that in mind, let’s take a look at a few scenarios and see whether a brand new or resale flat would suit you best.
Without a doubt, one of the main advantages of a new-build apartment is its ready-to-move-in condition. When you get the keys, you will be its first owner and everything in the property is brand new and freshly decorated in a broadly neutral style. If you’re looking for an investment property that requires no work before it can be let, or you don’t have the time or inclination to decorate your new home, this could be the perfect choice.
A resale property, on the other hand, will have had at least one previous owner, so it is no longer a blank canvas when you move in. Some decorating may be required to adapt the interior style to your personal taste, or to refresh the overall appearance. Older flats may well need more substantial home improvements such as a new kitchen or bathroom. If you don’t mind doing a bit of work, or you fancy taking on a ‘project’ and adding capital value, a resale property may be the way to go.
New-build flats come with guarantees, warranties and sometimes insurance to protect your investment from faults resulting from poor materials or workmanship. It is also standard practice for developers to remedy any ‘snagging issues’ you find after the purchase has been completed. While all of this is designed to provide reassurance to the buyer, experiences with housebuilders do vary. For your own peace of mind, having an independent property survey carried out before you buy is a wise move – even if it is a new-build.
Older properties are bought as seen, and the principle of ‘buyer beware’ still largely applies. This makes it even more important to get a survey done. Unless you are thinking of investing in a period property or a converted flat, a mid-level RICS HomeBuyer Report is likely to suffice. “The HomeBuyer Survey Report (Level 2) is an economy service that is suitable for most types of houses, bungalows and flats, which are conventional and traditional, in type, and construction, and which are apparently in reasonable condition.” explains one expert in the field. Crucially, should the survey discover anything untoward, the findings can be used to go back to the seller and renegotiate the price.
Look out for special offers and incentives that may be available when you buy a new build or off-plan apartment. Cash, holidays, white goods and stamp duty payments are all known to have been used by housebuilders to clinch the deal.
What’s more, new-build blocks of flats at the higher end of the price spectrum often come with tempting added amenities included in the price that are hard to ignore. From state-of-the-art security features and underground car parking to 24h concierge services, in-house gyms and swimming pools, they are all aspirational lifestyle accoutrements that appeal to buyers who value convenience and luxury.
Resale properties are much less likely to come with similar benefits. Your investment is based on the property alone, its location, size and overall condition and the terms of the lease. The best bargains are to be had for properties that are in need of updating, though there are restrictions on improvements and alterations you can make in a leasehold flat. Short-lease properties are another cheaper option. However, unless you are a confident real estate player or you are prepared to have the lease extended, be advised that this choice is not for the faint hearted.
How critical is the timing of your flat purchase? For buyers who have arranged a mortgage in advance, it is often the case that the offer expires after 6 months. This is usually plenty of time to get the transaction done.
If you’re buying a flat through an estate agent, you will agree the completion date with the seller during the conveyancing process, which will become legally binding when contracts are exchanged. While dates may change for all sorts of reasons, no-one will be keen to drag things out, and especially if there is a property chain involved.
New-builds are slightly different in that you’re buying directly from the housebuilder, and often while the flat is still under construction. Completion deadlines for the build may shift, sometimes by months, and this will be out of your control. If you’re investing on a tight schedule, you may need to find a new mortgage.
BTL investors will be particularly interested in the property’s EPC (Energy Performance Certificate) rating. Minimum Energy Efficiency Standards apply to virtually all rented properties (there are a few exemptions). If your flat doesn’t have a valid EPC rating of E or above, it cannot legally be let. There are government plans to increase this to C or above by 2025. New builds are already required to have an EPC rating of C or above and many just about achieve this minimum requirement.
Regardless of whether you’re looking to buy a home or investment flat, it would be sensible to assume that all modern properties are reasonably energy efficient, and new-builds especially so. But that is not necessarily the case. While there are plenty of new-builds with A ratings around, it is by no means unusual to find resale properties with higher energy efficiency grades than brand new homes! Your best bet is to assume nothing and research each shortlisted property on its merits before you make your investment decision.
Posted by Simon on May 26th, 2010
Posted by Simon on November 8th, 2012
