Investing in new-build houses can be a great way to expand your property portfolio and increase your return on investment as house prices rise. New-builds offer your tenants modern layouts and energy efficiency that older properties can’t match.
This guide will cover the benefits that investing in new-build properties this year offers landlords.
Energy Efficiency & Lower Running Costs
Increasing awareness of climate change and its likely impacts on the UK have driven government-led efficiency and environmental standards and brought the issue to the forefront of renters’ minds.
Developers are ensuring that their new-build estates are up to modern energy efficiency standards like the Future Homes Standard, which aims to decrease carbon emissions by 75-80% and prioritises low-carbon heating. These well-insulated, energy-efficient homes will lower utility bills with features like smart home technology integration and solar panels, making them more cost-effective over time by reducing utility bills.
Higher Demand & Market Appeal
Many buyers prefer new homes due to their modern design, warranties, and low maintenance requirements. First-time buyers keen to move into stress-free housing increasingly turn to them for peace of mind when dealing with heating systems and their open-plan layouts.
This demand for new houses can lead to quicker sales as buyers seek modern properties with warranties, especially appealing to first-time buyers and families. Thanks to the limited housing supply pushing up property values, new builds also have potentially higher resale values. New builds will likely remain attractive, future-proof options for investors in the competitive UK property market.
Lower Maintenance & Repair Costs
Unlike older properties, new-builds have warranties in place for 10 years after completion, covering major structural issues caused by faulty materials or workmanship. Older properties typically lack warranties, exposing landlords to unexpected repair costs and tenants dealing with safety issues.
Problems like outdated electrical systems can lead to expensive fixes and potential legal liabilities for investors and landlords. Disrupted living conditions will increase tenants’ chances of leaving when their tenancy expires, increasing the risk of landlords having an empty property on the market for an extended period. In newly built properties, the fixtures and systems are unused, leaving investors and landlords less likely to face costly repairs in the short term.
Stronger Rental Yields
Renters in the UK are willing to pay a premium for modern, well-insulated homes with updated amenities. Tenants value features that older homes often lack, like smart meters and EV charging ports. These features enhance the comfort and reduce the utility cost of renting.
In competitive rental markets, a new-build property can command higher rents because of these features and attract long-term tenants. The reduced risk of unexpected repairs also means landlords can maintain a steady cash flow while tenants stay for convenience and quality. New-builds offer an attractive, low-hassle investment for sustained rental income that older properties usually can’t match.
