Are new build homes cheaper to run? – The Truth

New build homes always look shiny and clean. The developers always make sure you have that glossy brochure in your hands when you go to view one.

But does a new build house actually work out cheaper to run than an existing home, or are the benefits greatly exaggerated?

It might seem a no-brainer that a new house would be less expensive to operate, but this isn’t always the case. New homes can have just as many latent defects and problems as an older home. Plus, newer homes have the latest engineering, which can mean that if something does go wrong you have to pay for the latest, priciest materials. This can lead to higher costs for repairs and replacements.

We split running costs into two sections.

# 1. Repairs

It doesn’t matter what home you buy – buildings always need to be maintained. The combination of heat, cold, rain, condensation, wind, subsidence and just about anything else puts a lot of pressure on your home.

Good Design

One of the benefits of modern homes is there are strict standards in force. Not only do developers have to get planning permission from the local authority (the council) but there are also specific building regulations that cover the various aspects of the construction.

Roof

Some aspects of a new build home should always be beneficial for a homeowner. A newly laid roof is normally more reliable than a roof that is 50 years old (assuming the new roof was built properly).

Foundations

In the same way as the roof, many new build homes need to have new foundations put in before the new structure is built. Again, providing that the work is done correctly, having a new solid foundation can be much more reliable for the buyer compared some other homes in the UK. It’s no secret that some existing houses don’t have any foundations at all! But these are typically much older homes that were built before foundations were a popular method.

Warranty

If you do uncover genuine problems with a new build home, your first point of call is to contact the developer who sold you the house.

Even if you have a warranty with your new build home (which the majority of homes should have) it will typically point out that for the first few years of the warranty period the developer is the first person you need to contact in order to sort out any problems.

This is why it’s imperative that home buyers understand exactly which warranty comes with their newly built house.

Most building warranties also have different levels of cover depending on when something goes wrong. It’s quite common to see a structural warranty for 10 years but a fixtures and fittings warranty for 2 years (also called the defects warranty).

Fixtures and Fittings

If you find issues with your fittings after 2 years the chances are you will need to pay for repairs. Because the items are likely to be the latest models (thinking about appliances) you should expect to have to pay premium prices to fix these (or trade down to cheaper alternatives).

Main Warranty Providers

The most popular warranty providers for new build homes are below:

• NHBC warranty (National Home Building Council)
• LABC warranty (Local Authority Building Control)
• Premier Guarantee

But it’s important to realise that there are other providers that are active in the UK. And each warranty provider will have its own code of conduct. The code of conduct for one provider might be much beneficial for customers. And at the other side of the industry there are certain codes of conduct that are more in the interests of developers.

So remember to look at the code of conduct for your provider.

#2. Energy Efficiency

Newer homes are built with energy concerns in mind. This means less gas, water and power are used.

Some of the features doing the energy saving are obvious (like double glazed windows). But there are also other benefits that you don’t always get to see when buying a home. For example, cavity insulation in walls is great for preventing heat loss.

All of these energy saving methods mean monthly bills will be substantially less than in an older home. This not only makes everyday life more manageable but also more affordable.

No Gas

Although the energy saving building methods will help to preserve insulation, some new homes are installed without any gas network! This means homeowners have to rely on electricity to heat their homes. Electricity is still currently more expensive than gas, so if you were to heat your home for as long as you would do in an older home, the bills may not be as low as you expect.

In the UK it is more common for new build flats to be built without gas than new build houses (this is with safety concerns in mind) but it’s worth checking what your energy sources will be in a new home.

 

Additional Fees

Buying new build homes can mean taking on the requirement to pay fees each and every year in the form of service charges and ground rent.

If your new build home is a flat, there is almost definitely going to be some type of service charge to pay each year.

Even if your new home is a separate building (like a detached property) if it is part of a new estate there is likely to be upkeep charges to maintain the wider area. In many cases a new build estate will have unadopted roads that the council do not maintain.

Your solicitor will be able to advise you on the ongoing fees that are needed. These are written into documents stored at land registry (either the title deeds or the lease agreements will detail more).

Many properties have escalating ground rents written into the title deeds which go unnoticed, resulting in higher bills for property owners. For some owners the ground rents have gone into thousands of pounds per year, making them un-mortgageable.

Conclusion

So to put a final answer to the question – new build homes can be cheaper to run when they are built right, properly maintained by the home owner and come with a good warranty. There will always be snags and issues to deal with – but isn’t that the same with life in general?