New build and period properties differ significantly in their benefits and drawbacks. But which is the best for investment? Read on to see where is best to put your money when it comes to homebuying.
The novelty factor
As a place to live, new builds offer something like no other property – they’re brand new. To some people, particularly first time buyers, this is highly attractive. It means no bizarre décor to remove, no mail to redirect and – most conveniently – no chain when you’re buying.
But this novelty comes at a premium. It’s estimated that on average buyers pay an extra 20% for new homes, compared to ‘second hand’ alternatives. That’s a hefty sum. Much like any new purchase, this additional price tag is often removed once the home has been lived in.
Many properties will increase in value over time (although there are always exceptions to this rule), but the premium you might pay for a new build can sometimes mean that it takes slightly longer for you to see your property increase in value above the amount you’ve invested. Add to this the trademark new-build problems like poor workmanship, lack of storage, thin walls, and small rooms, and you can see that new builds are not always so great for investment.
Upgrades and maintenance
So where do period homes stand when it comes to property investment? Often, their value is largely dependent on maintenance. A well-kept period home will grow steadily in value over the years. Insulation, draught-proofing, damp-proofing, bathroom and kitchen modernisation and efficient heating are all necessary upgrades for older homes. A period property that hasn’t been well maintained will sell for much less.
Supply and demand
One area where the two property types contrast the most is availability. Whole estates of new build properties are being built across the UK. Supply is clearly growing. In contrast, the supply off period properties can only decrease, or stay the same at best.
As a result, Georgian and Victorian properties on the market have become increasingly popular with home buyers. With only a limited number available, they are growing in value – and will continue to do so in the future if they are properly maintained. If you can get your hands on a period property, it could prove to be a worthy investment in the long run.
Maintaining a period home
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