Did you know buying a new-build home can be more budget-friendly than an older property?

If you’re looking to move this year, you may have started to weigh up whether to buy a new-build home or an older property. There are many contributing factors to this decision, but a big one is affordability. And when it comes down to it, new builds win by a long way.

So let’s take a deeper look at this. What makes new builds the affordable option? And how can you make the most of your budget when buying a new home?

Buying schemes for first-time buyers and home movers

One of the biggest perks of new-build homes is the number of schemes and incentives available to buyers. For both first-time buyers and home movers, these initiatives can make all the difference when it comes to saving cash.

Some schemes you can take advantage of are:

  • Deposit Unlock: Buy a new home with a 5% deposit and dramatically reduce your upfront costs. This scheme is available to first-time buyers and home movers.

  • Own New – Rate Reducer: An initiative that can give you access to lower mortgage rates. It’s a regular mortgage that uses a developer incentive to lower monthly payments for the initial period. (This period depends on how much you earn and which lender you are matched with.) Rate Reducer enables you to access mortgage rates below 2.88%*, which could mean a potential saving of up to £304 on monthly repayments**. This scheme is available to first-time buyers and home movers.

  • Shared Ownership: Purchase a percentage of the property (typically between 25% and 75%) and pay rent on the remainder, making homeownership achievable on a smaller budget. This scheme is only available to first-time buyers.

  • Deposit contributions: Some developers will top up your deposit to help reduce the upfront cost of buying your home. This added support not only accelerates your home-buying journey but can also make you eligible for more competitive mortgage rates by increasing your deposit size. This is available to first-time buyers and home movers

  • Part exchange: If you own a home already, many house builders offer part exchange. This is where the developer purchases your existing property directly, allowing you to focus on securing your new home. With part exchange, the developer covers the cost of estate agent fees and acts as a guaranteed buyer for your current property, saving you the hassle of selling on the open market.

  • Assisted moving schemes: Through schemes like Easy Move, developers work with local estate agents to market and manage the sale of your existing home—and they’ll cover the costs.

Aside from Shared Ownership, these schemes are exclusive to new-build homes.

To find out about which buying schemes are available at developments near you, check the description of the property or development on Zoopla, contact the developer directly, or seek advice from a specialist new-build broker.

Green mortgages and utility bill savings

New homes are built to increasingly higher standards and regulations to ensure improved energy performance and reduced water usage. This means that as well as benefitting from new technology and building practices, you’ll also get a few financial perks.

Green mortgages reward you for living in an energy-efficient home. If the property you’re buying or living in has an EPC rating of A or B, you’ll get cashback or a better interest rate on your mortgage. With 86% of new builds earning an A or B EPC rating, new homes are very likely to qualify.

Speak to a mortgage broker for more details on green mortgages and whether you could get a better rate.

The improved energy efficiency of today’s new-build homes also means you could save £979 a year on your heating, hot water and lighting costs on average.** That’s a potential saving of £82 a month.

Another sustainable benefit of new homes that’s often overlooked is the built-in water efficiency. The average new build homeowner uses 40 litres less (per person per day) than owners of older properties. Less water used = a cheaper water bill!

With savings to both your water and energy bills, a new home can really help to lower your monthly outgoings.

Fewer unexpected financial surprises

With a new-build home, everything is brand new—from the boiler to the roof. This means you’re far less likely to face unexpected repairs or replacements. And any defects you do come across will be covered by the developer’s multi-year warranties.

With the time you and effort you save avoiding renovation work, you can focus on settling in and making it your own from day one.

Compare that to an older property, where you could quickly find yourself budgeting for a new boiler or kitchen renovation when you uncover its horrible hidden history. Research has even shown it could cost more than £70k to bring an old home up to the modern standards found in new-build homes.

Over time, these savings add up. While an older home might seem cheaper at first glance, the ongoing costs of maintenance, renovation work and running costs can make it more expensive in the long run.

Why buy new?

While every buyer’s situation is different, there are a number of reasons new homes can actually be a more affordable option than purchasing an existing property. With financial incentives, lower running costs, and no unexpected repairs to pay out for, they can save you money upfront and in the long term. Add in the peace of mind that comes with warranties and guarantees, it’s clear why so many buyers are turning to the new build market.

*Example assumes a 3% homebuilder incentive and is based on mortgage rates available in the market, with a 2 year initial period and an LTV of 75%. Savings made in the initial fixed period only and mortgage repayments may increase thereafter. Independent financial advice must be sought from a regulated mortgage broker to access this scheme. This example should be used as a guide only and does not represent the suitability, eligibility or availability of mortgage offers for users. For exact figures, users will need to approach an official mortgage lender. Your home may be repossessed if you do not keep up your mortgage repayments. Rates valid as of 14-01-2025

**Example based on market interest rates, with an average house price of £360,000 and an average mortgage term of 35 years. Assumes a 3% homebuilder incentive and a 2 year fix, with 75% LTV mortgage. Independent financial advice must be sought from a regulated mortgage broker to access this scheme. This example should be used as a guide only and does not represent the suitability, eligibility or availability of mortgage offers for users. For exact figures, users will need to approach an official mortgage lender. Your home may be repossessed if you do not keep up your mortgage repayments. Rates valid as of 14-01-2025

 

Key takeaways

  • You can access buying schemes with new builds to save you money and help you buy
  • You can get a green mortgage and save on utility bills by living in an energy-efficient new build
  • You don’t have to worry about maintenance costs with a new build