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Much attention is paid to the early stages of a new home development as bricks are laid and the first wave of buyers start to complete and move in. But less often considered is the life cycle of new build homes, how long the first wave of owners stays and how the make-up of a development’s residents changes over time. The Countrywide research team’s role is to explore these issues so we can better understand how the housing market works. The team’s most recent research into new build homes exposes some of the subtleties of the new homes market.
Johnny Morris, Research Director at Countrywide explains;
”Most new developments rely on making some sales off plan prior to their completion which helps fund the construction. Often these sales go to investors who are both willing and able to put down cash well before their home is built, a time so far in advance of completion first time buyers would struggle to get a mortgage. But once a development has been completed, the makeup of owners begins to shift. Investors, many of which had bought off plan, start selling up to owner occupiers as their home ages. Our research shows there are 20% more owner occupiers in a new housing development after five years than there were on day one.
The first home owners to buy new build often behave slightly differently to buyers of second hand homes too. We all know that new homes attract a premium, and deservedly so. Buyers are willing to pay a little more for a home which is in pristine condition. Having paid this premium though, owners are less likely to sell in the first few years than someone who bought the equivalent second hand home. Eventually it seems a ‘seven year itch’ drives an increase in the numbers deciding to move on. Many owners often find six or seven years later their lifestyle has changed and their home no longer meets their needs quite as well as it initially did, so start looking for their next move.
So while for some there is a perception that investors snap up new build homes many new developments form long term communities, which much like their neighbours in older homes will change and evolve over time.”
Countrywide is the UK’s largest estate agency and property services group. Have a look at it’s sales site.
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