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New build versus old

publication date: Apr 1, 2006
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author/source: Jessie Hewitson
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Kate Barker, member of the Monetary Policy Committee and author of the Review of Housing Supply, commissioned by the government and published in March 2004, suggested that at least 70,000 more houses would need to be built each year to align supply and demand. In her view, the government needed to start making serious reforms to the planning structure (something Gordon Brown has promised to do in his prebudget report at the end of 2005) to allow the extra houses to be built, which would, in turn, make the market more affordable to first time buyers. If the government does indeed shake up the planning structure to allow an increase in building as it has promised, then many of us could find ourselves selling new build houses.

Even though levels of building are no where near Barker’s recommendations, there has been an increase. According to figures produced by the National House-Building Council, 159,053 new properties were built in 1999; in 2004 this figure was 184, 329. Brand new developments are springing up in town centres (for example, the river along London has seen a lot of building), creating competition between the developers who are having to get their properties just right in order to sell them.

So why are more houses being built? The answer is that with house prices moving upwards in recent years, developers have had plenty of opportunities to make money, (though times are getting tougher). Plus, planning restrictions of some types of building have become easier of late - high density apartments, New York-style high rise flats, have started to appear in London and other of the UK’s major towns, allowing 24 flats to be built in a space that a few years ago would have housed four properties, for example. In short, builders and developers are often building more per acre than now.

According to Rupert Lister, director at Fulham-based Inzo estate agents, 90% of prospective buyers are still initially looking for period properties. That said, he is noticing a change in attitude and a growth over the past few years in customers requesting new build. He is a fan of new properties: “New build developers are definitely getting more clever. Their advertising is incredibly lifestyle-driven and they are designing flats that are convenient, well located, and with good transport links.”

Chris Brown, partner at Boxall, Brown & Jones, a Derby-based estate agency and surveyors, also believes that new build have become more popular recently. “They’ve gained a lot of curb appeal. It’s driven by competition – developers and builders are paying more money for their land, so they have to make them more desirable to get higher returns. Now they have to be more innovative, they are investing a lot of money in PR and marketing. The market research is much more scientific these days.” He adds, “There are so many new builds on the market that people can afford to be picky”.

For those of us who simply want an easy life, new builds do hold considerable charm. They are chain free, and often well-designed. With new homes built to higher insulation standards, buyers can expect lower heating bills (and help save the planet, too) and if the builder is registered with the NHBC, then the property will receive a ten-year Buildmark Cover once it’s completed so they are covered if anything goes wrong with the building work.

With the increase in competition mentioned earlier, developers are currently outdoing each other with their incentive schemes. These range from paying the buyer’s stamp duty, or the legal fees or removal costs, to providing a top-of-the-range BMW free of charge in the new garage. Of course, one of the main advantages of new houses is the prospect of a DIYfree Sunday for a decade. New homes require a lot less maintenance and repair. Indeed, some buyers will factor this in to the cost of their mortgage and pay more for the property as they won’t have the expense of maintaining a 100-year-old one. As Brown puts it “You get what you think you are going to get. There are no hidden surprises. Everything in it is new.”

Old build houses, on the other hand, will always be sought after as you can generally expect more space – perhaps a bigger garden, or bigger rooms. There is more scope, you may be able to add some value to the house by extending it perhaps or you can tinker with your house over the years you live there, moulding it into the perfect place for you and your family. Capital appreciation is usually greater with period properties, also. The usual argument goes that older properties have more character – though some interesting new builds, with plenty of character, are certainly being built.

Charlotte Wyman runs her own lettings and property management company, Hometime property services. She bought her four-bed terraced house in Battersea with her husband in 2003, for £550,000. In her job Charlotte sees a lot of new and old build, and Charlotte says she would never consider buying new. “I prefer the aesthetics of older properties. They look more attractive, and have a ‘homely’ feel – new build can be a bit soulless.”

She adds, “Some of my clients bought new build riverside properties, and the rooms are compromised in size and you don’t get the same high ceilings. I also believe the quality of craftsmanship is better in older buildings – that 100 years ago standards were higher than they are today.” Charlotte, who was brought up in Cheltenham, Gloucester, says she has seen parts of her home town destroyed by 1960s and 1970s modern town planning. Investment-wise she believes that old properties have more capital growth potential than new, and if you are buying-to-let than old is a safer bet. “In my experience, tenants don’t want to live in 1960s and 1970sstyle building.” She admits she has been lucky and has not suffered any serious building problems with her building, but adds the only real downside is the extra cost of heating an old Victorian property.

There is concern that building new houses will see the countryside demolished, something no rightthinking person wants to happen. Speaking to Jo Turner, spokesperson for the House Builders Federation, she rejects this argument. “The green belt has, in fact, grown over the past few years. The myth that building new homes will diminish the green belt is simply not true. More homes are built on brownfield sites [land which has previously been developed] – this is true for 60% of new builds, compared with 41% in 1994.”

Last word goes to Piers Banfield, sales and marketing director for Banner Homes, who believes the future of housing will see an increase in new build properties (as long as the government delivers on its promises), and developers building higher-density flats. “We are required by planning authorities to build at higher and higher densities, meaning more flats and higher buildings, rather than semidetached homes.” He adds, “I can see the future being positive for new building, and for the image of new homes.”

Brown and Banfield see competition driving developers to build high quality homes, which many result in the British public re-thinking their attitude to new build. Out with the old and in with the new.