When shopping for a new home, most buyers are in the new build market or the older “home with character” search, depending on a mixture of factors like preference, budget, and DIY skills.
So, which is better, buying a new house or an old house?
Ultimately there are pros and cons of buying a new house vs. old house, but the decision is yours, and for some people, an old house is better than a new house.
Pros of Buying a New Build House
New houses are attractive to first time buyers, second-time buyers, landlords, and retirees for many positive aspects:
1. Turnkey Solution – Move Right In and Make Yourself at Home
With a new build, you get on with your life as soon as you have unpacked your suitcase.
You walk into a freshly decorated, carpeted, and equipped brand new home without inheriting issues from the previous occupants. No “pirates and mermaids” wallpaper in the room you intend to be your home office.
You get a clean, fresh start in your new house. A blank slate for you to showcase your style and taste in home décor.
2. Support to Buy Your New Home
It depends where you live, but government schemes to promote affordable housing for first-time buyers and key workers tend to focus on new build developments.
These schemes range from smaller deposits and low-interest loans to shared equity arrangements.
If available, such schemes can help you buy a house on a quicker timescale and with more affordable monthly payments.
3. Extras and Incentives
Buying a new house from a large development company gives you access to a range of extras and incentives that an individual seller of an old property can’t match—these range from upgrading your kitchen appliances to a choice of carpets and curtains.
In the same way, you can haggle for extras with a new car; you can negotiate for extras with your new-build house.
4. Lower Running Costs
A new build house uses the latest technology, giving you an energy-efficient home with no need for immediate maintenance.
You get minimal utility bills, and you save time and money on not having to decorate and maintain your new home in the first year or two.
5. Design Input
Part of the attraction of buying a new house off-plan is the flexibility to make some design choices. It depends on the developer’s approach, but you can often have a say in details such as interior layout and finishes specifications.
Plus, you get some options for the interior design included in the purchase price that you don’t get with an older house.
6. Leave the Chain Gang
Buying a new house means you don’t join a chain for that house. You may still have a chain if you are selling a current home, but you are not involved in a purchase chain.
Not having a chain of people who need to complete their transactions before you can complete yours is liberating.
You have less stress and anxiety, and your dream home purchase is more or less guaranteed to go through without other people’s drama.
7. Quality Standards
A new build passes inspections for compliance with the latest building codes and standards. You can be confident that your new home meets structural and safety standards applicable to your area.
Older houses built to different standards may have deficiencies in construction and have dated décor.
A new build will be pristine, clean, and safe with a comprehensive specification you can inspect before you buy.
A new house comes with a warranty which is a valuable safety net for potential defects.
Post-build issues will be minor in most cases, but the warranty means you can have problems big or small resolved quickly and at no expense from you.
You don’t get a builder’s warranty with an older house.
Cons of Buying a New House
There are plenty of plusses but also a few negatives from opting for a new build house.
1. Restricted Space
Although a new house development site is not like a shop sale where you can pile it high and sell it cheap, the developer wants to make maximum profit.
Squeezing as many houses onto a site as possible by minimizing yard and garden space means more profit. Reducing the size of rooms means using less material in the construction and again yields a higher income for the developer.
There are exceptions at the luxury end of the market where you are paying for an outdoor pool, landscaped grounds, and spacious rooms with multiple bathrooms.
Generally, in the “everyday folks” range of new build, space in rooms and land is restricted compared with an equivalent older house.
2. Initial Negative Equity
When you buy a new car, the resale price drops immediately you drive it off the forecourt because it loses that “new” tag.
When you buy a new build house, you buy a complete home package that is shiny and, well, new. It is no longer new when you move in, and all the appliances are now second-hand.
There are exceptions in a fast-rising housing bubble when your new home can be worth more in the first year than the amount you paid, but generally, in the first couple of years, your new home will have a dip in value.
Provided you don’t want to sell and move in the first couple of years, this slight initial negative equity isn’t a long-term issue.
3. Divided Loyalties
Many developers will strongly encourage you to use the company legal team to handle the transaction rather than the expense of engaging your own lawyer.
Although your budget may be tight, remember that the guy who writes the paycheck has the star treatment.
Your lawyer looks for your best interests and will carefully check terms and conditions and advise you if there are potential issues with the standard contracts like onerous clauses that may hurt you in a couple of years.
It is not in the company legal team’s interest to do anything but push the sale through as fast as possible.
4. Devil in the Detail
The small print can hide some nasty surprises as some developers pull some creative maneuvers regarding legal ownership – you may own the house but not the land.
As the first owner of the property, it is up to you to understand what you are buying and if you have full freehold rights.
Property ownership rules vary between different States and Countries, but it is up to you to ensure you understand what you are getting into with a new house.
5. All is Not Perfect
Building a house is a massive undertaking, and it is not surprising that you get a range of imperfections – missing sealant around the shower tray or poorly fitting windows.
Identifying and resolving these post-build defects is known as snagging. You have a limited time after purchase to get minor issues resolved, and it may be some time before you notice a problem.
6. Time is Money
When you buy off-plan, you have an estimated completion time.
In practice, the builder may not hit the target date – bad weather, supplies delivered late, many reasons may delay completion of your new house.
That leaves you with the expense and inconvenience of alternative accommodation and storage costs.
Pros of Buying an Old House
Old houses have their plus points, and these include:
1. Character Builds with Time
Older houses vary from historical to a few decades, but people living in a home make changes.
Older houses acquire extensions, conservatories, and other exciting features inside and outside. Some of the character may be from historic and original features or the impact of hosting families with different ideas and passions.
A new house is built crisply to a modern design, whereas an old house has had the time to acquire some unique and quirky features.
2. Room to Breathe
Older houses tend to be built in smaller batches and have more extensive gardens and higher rooms than newer houses. The additional space depends on the age and style of the house.
You can get older houses that are as small and cramped as any new build on a crowded development.
That leads nicely to the next plus point.
3. You Can See What You Are Buying
An old house exists, and you can examine it in detail before you choose to buy it.
A new house bought off-plan is a possibility with a specification, but you can’t walk around the rooms and see the view from the windows.
You don’t have to imagine the possibilities with an old house; you can walk around and see the house with all its plusses and minuses.
You can send in an expert to assess the condition and give you an accurate list of defects. You know what you are buying with an old house because you get to look at it first.
4. Location, Location, Location
People’s need for housing has not changed over the decades, which means most prime locations have an older house standing on them.
If you want to live in a desirable neighborhood, the probability is that you need to buy an older home.
5. Community Matters
Older houses are in established communities, near amenities because people with their needs for doctors, schools, and transport have been living in these houses.
Older houses are part of a town or city structure, and it is straightforward to integrate into a community when your home is an older house.
New builds can often put pressure on local services by adding additional housing to a region, and everyone on the development is new to the area.
The urban environment has not had time to accommodate new-build houses in the way it has adapted to the residents of older housing stock.
6. Future Development
A new-build house occupies a designated plot, whereas an older home tends to have more associated land.
Older houses often have room for expansion that you don’t get with the average new build. It depends on the house style and available land, but there are development possibilities.
7. Investment Value
A historic house is in scarce supply (they don’t build them anymore) and tends to retain or increase in value as buyers value a home with character.
Most older houses have a consistent, if not rising, value over the years if you keep them reasonably well maintained. If the house needs renovating, you get it at a lower price than in top condition.
Generally, you pay a fair market price for an older house that reflects the price other buyers will pay for a comparable home.
A limited number of new-build houses come onto the market every year, but there is a thriving business in the sale and resale of older properties.
If you buy an older home, you get a wide pool of available properties in various sizes and neighborhoods.
If you buy a new house, the developer’s site may not be in your preferred area.
9. Save Money
Typically, a comparable older house will cost less than the new build because the expectation is that you will have to spend some money on renovating and redecoration. Effectively you get a discount for the older property.
Alternatively, you get more for your money with an older house with more rooms and gardens than the amount you pay for a new-build property.
There will always be exceptions, but you can expect an older house to be a more affordable option in most areas.
Cons of Buying an Old House
Along with the upside, there is a downside; some of the disadvantages of buying an old home are:
1. Property Chains
When you buy an old house, you may be a first-time buyer and at the beginning of the chain or somewhere in the middle. Similarly, the person selling you the house may be at the end of the chain or in the middle.
Buying and selling older houses typically includes a series of linked transactions, and these chains can be awfully long.
A chain is only as strong as its weakest link, and one of those house buying and selling transactions can fall through and destroy the chain for everyone else or put in substantial delays as someone looks for a new buyer.
Older houses require regular maintenance because the house structure, fixtures and fittings, and garden are all mature.
Parts wear out, and there is a frequent need for repainting, filling, and maintaining that you don’t get in the first few years of owning a new house.
This activity represents extra monthly costs – often unexpected – and an investment of time from you and your family.
An older property may need rewiring, replumbing, and a host of other (costly) renovations to make the house livable. It depends on the age and condition of the property, but older properties may need extensive renovation before you can move in and be comfortable.
Although the seller may reduce the asking price to account for the cost of necessary renovations, it represents additional capital expenditure that the mortgage may not cover.
A new house may need minor renovations, but prospective homeowners who desire a new home with custom details may opt to build rather than buy.
4. Energy Efficiency
An older house may not be as energy-efficient as a new build. Insulation, double glazing, and other energy-efficient innovations may need retrofitting to cut down the cost of powering, cooling, and heating your home.
Utility costs for an older home may be higher than a new build because of the lack of energy efficiency as a standard part of the construction.
Some older properties may have legal restrictions on the materials and techniques you can use to maintain them. Historic properties have legislation aiming to protect heritage and culture in conservation areas.
If you need to carry out repairs and maintenance, you may need to spend more on traditional materials and techniques.
6. Mature Trees
Although mature trees in a garden are attractive, trees planted too close to houses give rise to problems with their deep and expansive roots.
There can be as much of the tree underground as above ground. These roots can undermine foundations, block up the drainage, and create physical damage when they fall.
Removing a tree can give rise to problems in changing the absorption rate of water in the ground around your house.
Trees are an essential part of the ecosystem but in an urban setting require careful management.
7. Storage Issues
It is an interesting puzzle that older houses give you bigger rooms but potentially fewer storage options—modern living results in a lot of generic stuff that needs a place to live.
An older property relates to a time when there was a lot less stuff in people’s lives, so your storage options may be limited with the rooms designed for a simpler way of life.
8. Older Technology
Older houses meet the best standards of their time and known needs. Today we know a lot more about building earthquake-safe dwellings, and we have lots of gadgets that need power outlets.
You can retrofit an older house to meet current building codes and supply additional power outlets, but it involves extra expense and compromises.
9. Increased Insurance Costs
Insurers calculate premiums based on the potential risk and potential expense if the insurer must payout on the policy.
Some older houses may carry significant risks of damage and may be potentially more expensive to replace or repair.
10. Survey Costs
An older house potentially has issues, and you need a professional or two to go over the place to establish the condition.
It would help if you had assessments of structural integrity, potential issues with mold and damp and bugs. It may be worth having three separate professionals to concentrate on these areas.
Difference Between Buying New and Used Home
|Buying a New Home
|Buying a Used Home
|You only get to rely on plans and drawings before purchasing.
|You can see and inspect what you buy.
|Minimal effort to settle into your new house.
|Renovation and remodeling may be necessary.
|The warranty covers post-build defects.
|Rectification works are an added expense.
|Located in new neighborhoods that may lack amenities.
|Located in mature neighborhoods.
|More space for the money.
|More built-in storage.
|Less built-in storage, depending on building age.
|Insulation may be compromised.
|Electrical wiring and plumbing are new.
|Depending on the age, rewiring and replumbing may be necessary. Expect more maintenance work.
|Newer finishing material s and technology.
|Higher quality finishing materials (if well-maintained).
|Smaller yards or garden space.
|Generally cheaper to insure.
|Generally higher insurance premium.
|More difficult to predict the resale price.
|More predictable resale value.
Top Tips for Buying a New House
In any transaction, the buyer needs to research and evaluate the deal to ensure everything is fair or working in their favor.
When it comes to buying a new house, the quality of the developer is essential.
Top tips for buying a new house include:
- Research the developer – unless this is their first project, the developer has a track record and a portfolio of previous projects. Check to see that the earlier houses rise in price and desirability. Remember, past performance does not predict the future, but it is reassuring.
- Chat to your potential neighbors. Unless you are buying the first house, some people are potentially already living in their new home on the site. These people can tell you what the developer was like before and after the sale and if they are satisfied with the quality of the product.
- Research the area – are you close to amenities like shops, schools, doctors, and public transport, or is the development isolated and remote?
- Hire your own legal support – you are spending a considerable amount of money on your new house, and it worth getting someone with your interests to advise on all the small print and potential pitfalls.
- Compare the new house price with comparable older properties in the area. You expect to pay a bit of a new house premium, but what is the gap between the new and old market? When you come to sell your new house classes as an older house.
- Negotiate for extras and incentives. The developer is selling houses so that you can strike a bargain for a quick sale. After the months and years of money-saving efforts, you want to get the most out of it.
- Plan to stay for at least five years if you want to sell at a profit.
- Review the plan and see if you have enough room on your plot for further expansion. You may want to add a sunroom, a carport, extension, or maybe a swimming pool in a few years. Not seeing the potential of the house beyond what it can do for you now is one of the common mistakes homebuyers make.
- Compensation for delays – if you buy off-plan, you may get delays on completion. These delays are expensive for you, and it is worth negotiating compensation if the house is not complete by an agreed date.
- Read the specification and ask questions about anything you don’t understand.
- Go through the warranty with your lawyer and make sure you understand what is covered and where the potential gaps will leave you with a bill.
- Ensure that the developer hands over valid guarantees for all appliances – you are paying for brand new, and you expect a minimum of twelve months’ cover.
- Pay a professional to go through and do a snagging survey before you take ownership. Unless you are an expert, you are likely to miss small details in the excitement of moving in.
Top Tips for Buying an Old House
When you buy an old house, you deal with an individual seller rather than a large company.
You need to invest more in assessing the house’s value and condition to avoid an expensive case of buyer’s remorse.
Tips for buying an old house include:
- Don’t skimp on your surveys. However tight your budget, you need to know that the house is structurally sound, not infested with termites, and a healthy building without excessive dampness and mold.
- Check insurance, utility, and property costs for an assessment of annual running costs.
- Understand your utilities – you can get older country properties that get their water from a well, and your heating system may require regular fuel deliveries.
- How long has it been empty? Unoccupied houses deteriorate rapidly – insects move in, and rooms get damp through lack of heating.
- What work is necessary or desirable? It depends on the house, but it may need everything from a lick of paint to a new roof. Or it may be in tip-top condition.
- Investment value? Is this a house that is going to make you money or absorb it with no return?
- Room for expansion.
- Problems with trees.
- Check previous work on the house meets building standards.
- Drainage systems – you want everything to be working smoothly, from guttering to wastewater.
- Details – are the rooms well-lit with plenty of natural light? Is the house properly insulated, and are there enough power outlets for modern living? Can you move in straight away?
When buying a new house or old house, ask these comprehensive home-buying questions, so you get your money’s worth.
Is it Better to Buy an Old or New House?
The answer depends on you, your budget, and your lifestyle because both old and new houses have their pros and cons.
A new house is better if you have no interest in maintenance or DIY and want an energy-efficient, clean, and comfortable place to live. An old house may give you a more exciting home and represent a worthy investment in time and resources.
It is probably worth looking at all available housing options in your preferred area before deciding on buying a new house or old house.
Is Buying an Old House a Good Investment?
The pros and cons of buying a new house vs. old house do include investment potential.
An old house is a finished product; unless it has the potential for expansion, it is unlikely to realize a huge profit as an investment. There are exceptions with highly desirable areas and holding onto the house for a long time or buying to rent.
Still, generally, most people don’t buy old homes as investment properties.
Old historical houses like fine art tend to keep their value, but you need to spend money on maintenance and restoration.
An old house that is cheap to buy because it requires extensive work may be an investment, but you need to compare the costs against the potential selling price. Some people make money in the property market, but you need to treat it like a business project.
Most people buy a place to live, and the uplift in house prices is a bonus when the time comes to move, rather than the primary goal of homeownership.
How Old is Too Old?
A house is never too old, providing you have enough funds to restore and maintain it. A house can be a hundred years old and in superb condition, having passed through the hands of loving owners.
Conversely, a house can be ten years old and wrecked through a lack of care and attention.
The age of the house is not as essential to your buying decision as the condition. You know your budget and appetite for property maintenance.
When you assess an older house, you need to know how much it will cost to bring it up to standard. Then you can compare prices between houses.
You may prefer to buy an older home that is fully maintained in preference to a younger house with expensive issues.
What is the best age of house to buy?
Provided the current owner maintained the house in good conditions, aim for a less than 10 years old house when buying an old home. The electrical wiring and plumbing will still be in reasonable working condition, so you avoid expensive repairs or renovation.
Is It More Expensive to Insure an Older Home?
A new house in a known flood or earthquake zone may be more costly to insure than an older property that has not suffered any problems in the past fifty years.
It is generally more expensive to insure an older house, but it depends on risk. Insurers work with probability, and the more likely an event like a hurricane or a falling tree is, the more expensive the premiums.
You can reduce your insurance premiums for old and new houses by talking to your insurer about risk mitigation – fitting a burglar alarm, rewiring, and adding safety features.