What actually is a ‘new-build’ property? New research has looked at the implications of losing new-build status for those looking to sell in the current market.
There is wide agreement amongst key UK mortgage providers on the broad definition of a new-build property. When it comes to the details, however, there are some significant differences.
According to Stripe Property Group, all lenders generally agree that a new-build is a home that has been recently constructed. Or renovated to such an extent that a whole new dwelling has been created. Yet, this is not always the case.
While the likes of Nationwide, Natwest, and HSBC say that a new-build must have been constructed in the past two years. Santander only considers a property to be a new-build if it was built within the last year unless never previously occupied.
What’s more, Barclays goes so far as to say it doesn’t matter how long ago the property was constructed. Just so long as it has never left the ownership of the developer. And was “registered” in the past two years.
Lenders’ definitions also differ around occupancy. While most agree that a new-build must not have been previously occupied. Nationwide and Barclays say that if a property is less than two years old and is still owned by the developer, it can have been previously occupied by rental tenants and still be classed as a new-build.
“… It’s important for homebuyers to understand what is actually classed as a new-build. As this will influence the price they will initially pay. As well as the price they can justify when looking to sell the property further down the line,” said Managing Director of Stripe Property Group, James Forrester, adding:
“Losing their new-build status may prevent them from commanding the same high premium that they originally paid. However, the property itself will still boast the benefits associated with a new-build. And therefore, should still secure a far higher price than comparable, older homes in the current market.”