There are multiple benefits when it comes to investing in a new-build property, and the housing type is increasingly appealing to a particular type of person.
From first-time buyers to property investors, new-build homes attract a broad range of people thanks to their advantages over older, second-hand properties. And new research has found that an additional target market could be increasingly important for the new-build sector.
Quick Move Now has noted an increase in the number of over-55s seeking a new-build property as they look to downsize and release equity from their current home, or aim to future-proof their residence as they get older. According to the firm, new-builds are giving bungalows a run for their money.
From a property investment perspective, this could open up an additional target audience when it comes to tenant types, allowing investors to broaden their marketing strategies to older tenants and retirees, as well as the likes of young professionals.
An upgrade from a bungalow
There are many reasons why people choose to sell their existing homes as they approach or progress through retirement. This could be to downsize to something more manageable, to free up some cash, or to move into something more appropriate for old age.
Bungalows have traditionally been a top choice for over-55s to move into. However, the property type is in short supply across the UK, with the latest government council tax figures from 2021 showing that they make up just 9.6% of the UK’s total housing stock.
This falls far below the level of demand, and is one reason why many people approaching retirement are now more likely to consider a new-build. According to Quick Move Now, 42% of homeowners looking to part exchange their current home for a new-build property are downsizing; many of them are retired or approaching retirement.
A part-exchange can be a good option for those who want to avoid the hassle of selling their existing property, as you don’t have to deal with viewings, estate agency fees or delays from buyers being in a chain. As Quick Move Now points out, it is an added incentive for many over-55s to opt for a new-build property.
New-build property benefits
Danny Luke, managing director at Quick Move Now, pointed out that research conducted by the NHBC Foundation and the University of Cambridge Centre for Housing and Planning found that older buyers that were downsizing were 20% more likely to choose a new-build home.
Within this research study, which surveyed people aged 55 or over that had recently bought a new-build property in the UK, the top reason for choosing a new-build over a bungalow or other housing type was the lower maintenance costs, cited as of much importance or of some importance by a total of 96% of respondents.
Next, over-55s favoured the idea of having a warranty, which was cited as an important factor in choosing a new-build property by 93% of people. In the UK, all new-builds come with a standard warranty period of 10 years, offering an added layer of peace of mind for owners.
Lower running costs scored another vote for new-build property for 95% of respondents, and no upward chain was a key benefit for 83%. Being able to select fixtures and fittings is another advantage that is unique to new-builds, important to 79% of buyers, with 58% of people wanting to be the first residents of the home.
A lot to offer
Commenting on Quick Move Now’s latest findings, Danny Luke said: ““Homeowners may choose to downsize in retirement for a number of reasons; both practical and financial. From a practical perspective, new-build homes require less upkeep and maintenance, and the 10-year NHBC warranty offers additional peace of mind.
“From a financial perspective, new-build properties tend to be more energy efficient than older homes, which results in lower bills. In addition to monthly savings, downsizing offers homeowners the opportunity to release a lump sum of equity from their current home, which can then be invested to help fund retirement.
“The variety of different property sizes and layouts available in one development means there are options available to meet downsizers’ differing needs and budgets.
“Another factor in many over-55s considering new-build properties is the range of incentives available when downsizing to a new-build home. One example of this is property part exchange, which can offer homeowners looking to downsize the option of an easier, smoother, and less stressful move.
“This is far more appealing for many than trying to navigate the stress and uncertainty of trying to sell on the open market.”