Can You Sell a New Build After 6 Months or Even 1, 2 & 3 Years
Looking at how to sell a new build property, how you can sell this type of property and how we can help.
Alexandra Ventress ★ Digital Content Writer
Table of Contents
Selling a property can be a stressful time, With estate agents to go through, viewings to prepare for and host, as well as negotiations, it is easy to feel overwhelmed. And new build property sales are no different.
On top of the stress that house sales bring, you may be wondering, can you sell a new build after 6 months, or even 1,2 & 3 years?
In this blog post, we will be looking at when you can sell your new-build property, how to add value to your property and how we can help you sell a new build house in as little as 28 days…
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Why are new builds so overpriced?
The reason that new-build homes are often overpriced is because they are subject to the new build premium. This means that you end up paying 2.5 more than the median price for your property. You will often be charged this premium due to the following reasons:
- The property and everything inside it is new and unused
- It will be more energy efficient than other properties
- The property is ready to move into
- It is ready to move into
- You will typically receive a guarantee of around 120 years or more with your property
If you wish to avoid losing money over this premium, you can either make changes to your property that will help boost the value, or you can stay in your property long enough for house prices to rise and cover the difference.
Another reason for a higher price tag on new build homes is due to the rising cost of construction and labour. Many new home developers make up the price for their properties in order to remain profitable.
How soon can I sell a new build property?
In the UK, there is no legal time limit for how long you must own a home before you sell it. This means in theory you can sell a house as soon as you have bought it. However, there are a couple of pitfalls with doing this that you need to be wary of.
The first issue that you may come across is Early Repayment Charges (ERC). These are charges your lender may bill you for if you pay back your mortgage in full before the agreed length of time. This is done so your lender can recoup any lost interest.
You may also find that your buyer may struggle to finance the property as lenders, banks, and building societies may view the quick turnaround as a risk. In order to avoid this, it is recommended you follow the 6 months rule…
Should I sell my new build after 6 months of owning it?
If you want to sell a property quickly after purchasing it, most lenders will recommend you follow the 6-month rule. This is because the majority of lenders won’t lend against a property that has not been registered with the same owner for months with the Land Registry.
By selling a new build after 6 months you are able to sidestep this rule, and hopefully get a faster sale as a result.
Should I sell a new build property 1 year after buying?
If you decide to sell your home within a year, you may have to consider the financial implications of your sale. As we have already mentioned, there is no minimum time to own a home before you sell, however, there may be tax implications that come along with it. If you gain a profit from selling a property, then you may find yourself having to pay capital gains tax.
When you complete a sale or dispose of an asset and have gained a profit from the transaction, you may have to pay CGT. If you are selling a new build home after a year, you have the potential to pay capital gains tax rates of up to 20%. If you sell your property less than a year after you originally purchased it, then the fee may be even bigger as it will be taxed at the same rate.
Does a new build house value drop after 2 years?
When selling new build after 2 years, you may have heard that new-builds decrease in value after two years. This is due to a study done by the Financial Times, which said that new build properties can lose as much as 10% of their value in the following 7 years after they have been sold. Exactly how much your new-build will be devalued will depend upon the wider market, as well as the condition of your property and the popularity of your housing developer.
However, you will be relieved to know that the majority of new build properties will not lose as much as 10% of their value and many will regain the value.
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Do new builds get down valued?
When you are selling a new build house, your aim will be to make the most money possible from your sale. However, as with any house sale, you run the risk of your property being devalued. Below we take a look at some of the reasons why your newly built property may be devalued:
Depreciation
Unfortunately, one of the biggest issues new builds face is the depreciation of value. Once you move into a new build, they are no longer new. This means that the premium you paid no means nothing, so your property has already decreased in value. Another issue you may face is supply vs. demand. Once you decide to sell your newly built property, you may be surrounded by others in the development that are exactly the same, meaning you may have to go lower to attract a buyer.
Risks
New builds are often built upon land that pose higher risks to lenders, despite the strict regulations that they adhere to. You may often find newly built housing developments near main roads, airports, landfill locations, and sewage sites.
The locations of these developments will not only affect the property but will also make reselling at the original asking price a lot more difficult.
Lender valuation
When a lender values a property, they will take into account a variety of factors in order to get the true market value of a property. This will unfortunately be a far cry from a developer’s asking price.
Whilst a valuer will be looking at location, house size, and the potential resale value of the property, a developer will decide upon the asking price by looking at the cost to build, their materials and labour.
What devalues a house valuation?
When it comes to selling a house, the aim of the game is to get the best price possible for your property. Because of this, before you put your property on the market you may wish to look inwards and see if anything could be holding you back. From poor maintenance to subsidence issues to even pets, you may have something in your home that is affecting the value of your new build and stopping you from achieving the best possible price…
Whilst there is certainly nothing wrong with undertaking a little DIY around the house, if it has been done poorly you may find yourself running into a couple of issues that run deeper than you may originally have realised. Small errors like poor paintwork and shoddy tiling can negatively affect the value of your home, however, they are fairly easy fixes. Bigger issues such as a poorly completed DIY renovation project may be harder to rectify and could hurt your valuation.
Whilst having a property located near a main road can be great for commuting, however, the noise that it brings can be a real issue for potential buyers. Thankfully, there are some steps you can take in order to soundproof your home, such as double-glazing your windows.
If your curb appeal is not what it should be, then you may struggle to find yourself a buyer for your newly built property. First impressions matter and if your kerb appeal is not up to scratch, then you may end up suffering as a result. If you have a messy front garden. with very little going on for it, then it’s time to break out the lawn mower and a tin of paint. Repainting the front door can be a great way to brighten up a tired-looking house, as can simply mowing the lawn and planting fresh plants.
As much as we love our pets, a sad fact of life is that not everyone is as crazy about them as we are. Pets in the property can put off potential buyers and can even cause damage to the property (think scratches in the paint) and cause odours to hang around. When having pictures of the property taken or conducting viewings, it may within your best interest to pop their bed and toys out of sight as well as having your carpets professionally cleaned.
Energy efficiency is an issue that is quickly rising to the forefront for buyers. As a society, we are becoming more eco-conscious and buyers don’t want to spend a fortune on their energy bills. It is also now illegal to rent out a property with an EPC rating of less than an E. Thankfully, there are measures that you can take to help improve your energy efficiency. Steps such as replacing your boiler with a more energy-efficient option or replacing your boiler with a more energy-efficient option.
If your home looks like it could do with a little TLC, then you may find this can negatively affect the value of your property. This means only chipped paint, faulty windows, worn carpets etc need sorting before you go on the market if you are looking to get the best price. If there are any jobs that you are not confident with, you should bring in a professional.
How to add value when you sell a new build house
Now we have looked at some of the areas that may devalue your property, we will take a look at some of the ways that you can add value to your new build:
One of the best ways you can add value to your property is through decluttering. A clean home is a well cared for home, and by decluttering your home before viewings, you are setting yourself up to get the best possible price. It also helps your property to look both bigger and brighter.
If your new build flat or property has single-glazed windows then you can upgrade to double-glazed. This will not only help your energy efficiency but it will also provide additional soundproofing and boost your value.
Another simple way you can add value to your property is by undertaking any odd unfinished DIY jobs around the house. This means any leaks, unfished or wonky tiled walls, and any other botched DIY jobs need to be fixed before any viewings or pictures. According to research, people will often overestimate how much things will cost to repair, so buyers may be turned off when viewing your property and as a result may offer less for your home.
Did you know that a clean home can add up to 5% on offers that potential buyers make? A clean home shows buyers that it is well looked after and this will appeal more to the majority of buyers than a home that has been neglected.
If you are looking for ways to boost the value of your new-build property, then your garden may be a great place to start. Gardens are an excellent way to help boost your value and only require small changes to help raise the value of your home. Simply repainting tired fences, mowing the lawn, cleaning the patio and planting fresh flowers can all help.
Who should I sell my new build house to?
Who you sell your new-build property to is a decision that only you can make. The most popular routes when looking to sell your new build will typically be: house auction, cash buyer, and estate agent. As with any selling decision, there are pros and cons with each of these options Below we take a look at your options when it comes to selling property:
House Auction
A house selling route that is becoming increasingly popular is to sell your property through a proper y auction. An auction works by entering your property in the lot and agreeing on a minimum reserve price for your property. Should a buyer meet this minimum price, the property will sell.
The best case scenario for auction is that multiple buyers will be interested in your property and will engage in a ‘bidding war’ and will raise your final profit. They are becoming increasingly popular due to the security that they bring. Once the gavel falls, the winning bet is legally binding and the winning bidder cannot pull out of the sale without facing financial penalties.
However, you are not guaranteed a sale when you sell through an auction. They can also be time-consuming, meaning that if you are looking for a quick sale they are less than ideal. On top of this, selling at auction is not without cost, as auctioneers charge fees in order to cover the cost of marketing sand selling your home, which will eat into your final profit.
Cash Buyer
If you are looking for an alternative route house sale route, then you may be interested in selling through a cash buyer. A cash buyer is a group or person who is able to purchase your property without the need for a loan or mortgage. They can buy your property in a time scale that suits you, helping to give you security that can be hard to find on the open market.
They are also able to purchase your property quickly and usually without hassle as if they are a genuine buyer, they will have the funds readily available.
However, if you decide to sell with a cash buyer you should be careful to make sure they are a part of a regulatory board such as The Property Ombudsman and The National Association of Property Buyers. You will also not get 100% market value for your property, however, in exchange for this you get a fast sale.
Estate Agent
Another great way to sell your new build home fast is through an estate agent. A big advantage of selling through an estate agent is that they will undertake the hard work of the sale for you, organising viewings, writing listings, and helping with negotiations. However, depending on who you sell your property with, you can spend months waiting on the open market. If you are looking for a way to sell your house fast without the estate agent fees, read on…
How can I sell my new build house?
When it comes to selling a new-build house, you may find that selling can be difficult. Finding a buyer, hosting viewings, and dealing with solicitors can all take their toll and add unnecessary stress to your house-selling journey.
But it doesn’t need to be that way.
We are The Property Selling Company, and we believe that selling a house shouldn’t be complicated. In fact, we believe that it should only be three things; fast, effortless, and free.
That’s why we have made it our mission to change the way you feel about selling your house. Instead of forking out for expensive legal bills and estate agents fees, we cover it for you, it’s just one of the ways we take the stress out of selling.
Our dedicated team of property experts are by your side throughout every step of the house-selling journey, helping you to sell your new build property in as little as 28 days.
So if you are ready to sell your new build property and kickstart your selling journey, get in touch today by filling out one of our free no-obligation valuation forms or simply give us a ring!
