New builds versus older properties in London: the pros and cons

What buyers need to consider when deciding on a newer or older build

Deciding on buying a property is one of the biggest responsibilities in most people’s lives. As well as location, style and size, a key consideration is whether to buy a newer or older build.  In turn, sellers need to understand how to market the different types of builds to prospective buyers.

Definitions

A ‘new build’ is a new construction as opposed to the renovation or refurbishment of existing structures. By definition it has never been lived in. An ‘old’ build, has had an owner. In this article we are also looking at ‘newer’ builds, from the 1990s; largely compared against the ‘older‘ homes – built in the great post World War 2 building drive – and even further back to turn of the 20th Century, late Victorian and Edwardian periods.

New Builds: Paying a premium

Beware that developers price new build properties at a premium, so you will pay for the fact that everything is brand new. (Think of the immediate loss of value when ‘driving a new car off the forecourt’.) This means that new builds can lose their value more quickly than older houses. According to Hamptons Estate agents, 12% of new properties were resold for less than the purchase price in 2022, whereas only 6% of older homes were affected. This might reflect the reality of living in certain new builds: including smaller bedrooms, living space and gardens. In addition, leasehold properties may mean extra charges, developers may not provide good after sale service, and there may still be building nearby for years to come.

New Builds: Custom homes and less maintenance

Aside from the negatives, new build homes do have several things going for them, especially where purchasers are able to design their house off-plan from the builder, effectively customising their new home. On top of this, as everything is essentially brand new, there should be less maintenance costs, at least for the first ten years of ownership, as well as some guarantees should anything go wrong – although it is common knowledge that a lot of new build properties suffer from ‘snagging issues’ and the finished property is not always as expected when bought off plan.

Newer builds: Increased supply but small and inefficient

The reality is space in London is at a premium so demand for older builds, which remains high, cannot be fully satisfied. Hence newer builds are the growth area. But that doesn’t mean they are for everyone: disadvantages include smaller bedrooms, living space and gardens.  Beware of the fact they may be due multiple repairs: a double-glazed window produced today will have a lifetime of 25 to 30 years, a standard roof should last 20 to 25 years, and a boiler should last 10 to 15 years. Plus, the Energy Performance Certificate (EPC), designed to regulate the energy efficiency of homes and required when a property is constructed, sold or let, were not introduced until 2007, so these homes will be less energy efficient than newer ones.

Newer builds: Advantages

Properties built say in the 1990s are not much different from new homes, and they typically lag only slightly behind the millennial design trends in floor plans, interior finishes and amenities. Once recovered from the early 1990s stock market crash, when properties fell in value by as much as a third, many new properties were becoming bigger again. In addition, the open floor plan took off.

Older builds: Demand a higher price

Expect to pay more for an older property, especially if it still has period features and is set within an idyllic tree lined neighbourhood. As well as getting a larger property compared to newer builds, you are inheriting a piece of history and joining a community, often with an organised resident’s association.

And whilst a 120-year-old house, say a Lutyens property in a planned garden suburb, may have all the charm in the world, look out for potential drawbacks: Is it structurally sound? Are there any planning limitations should you wish to modernise or extend? Of course, most of these issues will come up in a survey, and a good agent will help you to clarify these matters.

The innate edge of an older property

Now let’s measure up the advantages of an older build: think about the pounds for feet ratios since the 1950s; every decade (and most steeply since the 1980s) people have paid more in the UK for less space (and this is most acute in big urban areas like London). This is because developers keep building in densely populated areas and tend to prioritise plot numbers over plot sizes. This is one of the reasons there is still a premium on older builds- with demand exceeding supply, for example in East London, meaning prices tend to hold. Also, think Islington or Muswell Hill town houses which are often split into two or even three units. Back in the day people enjoyed bigger spaces to sit as a big family in the living room, and shared large rooms (admittedly to often house large or even multiple generations of families). In addition, windows were more ornate and larger and gardens were bigger to accommodate the needs of large families. 

Like everything, each decision is different, reflecting the needs and wants of every potential purchaser and seller albeit a compromise might be achieved by choosing a property with a mixture of character and modern features - you see a much higher price for a warehouse refurb for example as it mixes styles and less supply demand drives pricing up.

Stephen Ludlow says “When buying, a mistake to make is merely following trends, for example buying New Build off plan at a property show based on a virtual image or model, in an area you don’t know or live some way away from.”

“Take time to look at several properties, visit the area, shop, and eat out locally, do the commute to work, and speak to other residents in the block or street about why they live there and how long they have lived there.”

For residential property services, property advice, valuations or to view a property contact your nearest ludlowthompson.