November 28, 2023

Why Building a New Home is the Smartest Investment for Your Future

Why Building a New Home is the Smartest Investment for Your Future


Why Building a New Home is the Smartest Investment for Your Future


Before the crash in 2008, the UK was awash with small developers. Money was easy to secure from banks for both developers and buyers. This meant building a house was usually cheaper than its sale value, and profits were high. After the crash, however, most small developers disappeared along with the lines of credit. Mortgages also became harder to access.

Small developers have not returned in substantial numbers. The reason is simple: it's difficult to make a profit. The risks are too great. The sums don’t add up.  

In fact, if you ask a valuation surveyor the worth of a proposed new house in a particular area, they are likely to tell you that, once land, professional fees, and construction costs are added, it will not be as much as the costs. Often, the two figures are miles apart.  But should this be a reason not to build?


Why are Houses Expensive to Build?

Since banks no longer hand out mortgages to every woman, man, and his dog, house price inflation has cooled. Construction cost inflation, in comparison, has far outstripped this, meaning it is more expensive to build than buy. For example, the cumulative house price inflation in the UK between 1998 and 2008 was approximately 150%. From 2009 to 2018, it was about 40%.


Construction inflation, partly due to Brexit with a weaker pound and a cut-off from access to European skilled labour, has been much higher. House price inflation since 2008 has not kept pace. Another factor in this is building regulations. Mainly due to the Green agenda and the desire to save the planet, building regulations have become more onerous over the years. Back in the early 2000s, houses could be built with wafer-thin walls and insulation, cheap electric storage heaters, and poor-quality windows.  They were as cheap as chippies.

Now, houses are expected to have plenty of insulation, high-quality windows, ASHPs, and MVHRs, and solar panels to meet the latest 2023 SAP. Excellent energy ratings are a must. This has a large impact on capital cost but does mean long-term savings in running costs, as well as saving the planet.


A Future-Proof Investment

But this does not mean you should buy rather than build. Government legislation across the UK will force future homeowners to upgrade their heating systems. Gas and oil boilers will need to be replaced, and houses that don’t do this could become either unsellable or massively reduce in value. Although grants of around £7,500 are available to undertake this work, it is likely older properties will also need new insulation, and even radiators and pipework. The costs for these upgrades could be huge, estimated at £33 billion for Scotland alone. Almost all of this will have to be paid by the homeowner.


But even with these upgrades, will it be worth it? It will be almost impossible to achieve the same performance of a brand new SFS Hebhome, for example, by retrofitting an old house. Running costs are also likely to be much higher.


Future-Proofing Your Investment – The Value of Modern Technology

A new home is future-proofing your investment. No need to worry about replacing old technology, retro-insulating, or sky-high heating bills. Quickly, older properties will fall in value, while those with superb energy ratings will attract a premium. So, even though your new house is more expensive to build than to buy today, it is a no-brainer to do it for tomorrow.


The Real Reason to Build

The reason to build transcends investment or energy efficiency; it's about crafting a sanctuary where life unfolds. A HebHome is more than just a structure—it's a home of architectural beauty, offering daily enjoyment. Picture a wall of glass framing a breathtaking panorama: Scottish islands and lochs, or the lush, verdant English countryside. Such views are priceless, offering a daily connection to nature's splendor.

Yet, in today's market, there is a tangible value to such beauty. Property surveyors are shifting focus beyond traditional metrics like location, bedroom count, or bathroom number. They are now appraising homes for their energy efficiency and advanced technology. But paramount is the architectural elegance that characterises each HebHome. This intrinsic beauty, once a subjective quality, is now a quantifiable asset, factored into valuations. It's a recognition that a home's allure lies not just in its utility, but in its ability to captivate and inspire. For those considering the future resale value of their investment, this evolution in valuation is a reassuring indication that your HebHome is not just a purchase; it's a legacy.


If you would like to discuss your project, please get-in-touch.

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