Buy-to-Let: New builds, is it time to invest?

With the increase of new build properties, many are wondering whether it’s worth the investment, to have a brand new, clean and modern property without the history of prior tenants inhabiting it.

To understand whether it’s worth the risk, It’s always good to consider that regardless of it being a new build or an old build, the basics of a good investment still apply. This means care needs to be regarded into considering the rental yields and its position within the rental market as a whole.

Over the last decade, we have seen a spike in increased new build properties, with a forecasted 205,000 new homes to be built in 2022, as reported by Statista (2021). Across Q1 of 2021, the UK is seeing a 3% rental growth in annual rent, demonstrating an increase of +1.3% a year ago. Zoopla further reports on the average increase in rental value from £923 per month, from £859 last year. Regions In the UK are reporting a 10-year rental growth high, in the North East, South West, East Midlands and in Wales, demonstrating that now is the perfect time to be investing in real estate for capital gain. The recent boom in newly built buy-to-let properties can be demonstrated in the hotspot rental sectors of Manchester, Liverpool, London and Birmingham, with an anticipated increase in other regions within England over the next decade.

New builds offer a great selling point in the rental market. They offer contemporary and modern interiors, suitable for a range of prospective tenants inclusive of working professionals and families alike. New builds in prime locations and emerging hotspots can make an incredibly attractive listing for prospective tenants and can overall increase the annual rent solely based on the location of the development.

New builds purchased early in the initial construction may also benefit from discounted rates and lower prices, offering up to 5% off. Buying an off-plan property, meaning the housing development hasn’t been completed yet, allows for some flexibility regarding being able to liaise with the developers and shape the property to your needs, to an extent. Another key benefit would be the potential for capital growth and the possibility of a complimentary 10-year builders warranty.

The great thing about new builds is that they come with little-to-no maintenance. All appliances, electricity, water and plumbing systems are newly integrated, which gives you a chance to test it and see the original paperwork, inclusive of having direct contact with the development organisation for any inquires. Prospective tenants should not face any issues regarding the maintenance of the property, for at least the first couple of years.

Although new builds can face their small share of problems such as making sure to thoroughly check the planning and keeping a sharp eye on the build for any built-in flaws, this can be rectified by having a ‘snagging company’ survey the house prior to filling out the paperwork. Before buying a newly built buy-to-let property, it’s important that you thoroughly go through the development plan and keep an eye out on the property market for which you’re looking to invest. Nevertheless, these are basic tips that you must be mindful of before any property investment endeavour is taken.

Big Roar is a boutique property investment organisation that specialises in off-market, below market value and high yield opportunities working with hand-selected, reputable developers with unblemished track records. We offer a range of exclusive newly built and refurbished buy-to-let properties, offering high rental yields in prime locations. Have a look at our selection of current investment projects and to gain full development and financial details with exclusive pre-launch access.

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