How Can New-Build Properties Save Money for Landlords & Tenants?

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5 Ways New-Builds Can Help You Save Money in the Buy-to-Let Market

As a property investor, you’ll want to find properties that help you reduce costs and attract premium-paying tenants.

For that reason, you may want to consider new-build properties. These homes offer numerous cost-saving benefits to investors and tenants compared to older, pre-existing homes.

Today, we’ll look at ways new-builds can help buy-to-let investors save money while growing their property portfolio.

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New-Builds Mean Cheaper Energy Bills

New-build homes in the UK must meet high energy efficiency standards, making them eco-friendly and cost-effective to heat. This is critical for two-thirds of UK buyers who prefer or are considering new builds.

According to Zoopla, over 80% of new-builds boast an A or B rating on their Energy Performance Certificate (EPC), starkly contrasting to the mere 4% of older homes achieving such efficiency.

Equipped with condensing boilers, heat pumps, solar panels, double (or triple) glazing, and insulation, new-builds feature modern energy-efficient appliances and heating systems.

A 2023 study by the Home Builders Federation revealed an average annual savings of £2,600 on energy bills for new-build homeowners and tenants. For some buying a house in the UK as a foreigner, new-builds with cheaper energy options is a popular feature.

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New-Build Developers May Apply Cost-Saving Incentives

One major perk of purchasing a new-build development through a property investment company is that you may be able to enjoy incentives from the developers.

In off-plan investments, developers use incentives to entice buyers to purchase their properties before construction is complete.

For instance, developers may apply discounts on the price of the property. This means you’ll get a brand-new property for a better price than its actual market value. It also means that investors will see capital appreciation straight away, as the cost of the property will increase when it is completed.

Additionally, some developers may include white goods and furniture packs in the deal. Certain developers may also cover the cost of legal fees and stamp duty, though this should only sometimes be expected.

New-Builds Offer Higher Security Which Lowers Insurance Prices

New-build properties often offer better security features, potentially lowering insurance costs for buyers and tenants.

A considerable number of these homes come equipped with standard burglar alarms. In addition, specific new-build properties – particularly buy-to-let flats – boast concierge services and CCTV surveillance. These features can significantly influence insurance rates for both building and content coverage.

In addition, you also do not have to pay extra to install these security measures in the first place.

Read More: To find properties with concierge services, check out our guide on buy-to-let flats for sale.

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Maintenance & Repairs Should Be Minimal

If you were to buy an existing property, you would be more likely to pay for a multitude of repairs and renovations to get the property up to a standard that would attract the right type of tenants.

With new-build properties, you’re unlikely to shell out for maintenance and repairs for a while. The white goods are unlikely to break down and would also be governed by a guarantee from the developer. In addition, the property should be built to the latest specifications, reducing the chances of something going wrong for a few years.

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New-Build Properties May Not Need a Comprehensive Survey

When acquiring a pre-existing home, a survey – an extensive and often costly assessment of its condition – is crucial to the mortgage process. On average, the expenses for various surveys typically range from £400 to £1,500. However, when opting for a newly constructed house, there may be a choice to forego commissioning a survey altogether, as the property will be in much better condition.

Instead, you may simply choose a less expensive snagging survey.

A snagging survey is a thorough inspection conducted on a new-build property to identify and document any defects, issues, or unfinished work, often referred to as “snags.”

These snags could range from cosmetic imperfections to more significant construction or installation problems. The survey is typically carried out by a professional snagging inspector or a surveyor before the buyer moves into the property. The findings are then compiled into a snagging report, which is submitted to the developer for rectification. This process ensures that the new homeowner receives a property in optimal condition and helps address any outstanding concerns in the construction or finishing of the home.

Discover More: If you’d like to see more buy-to-let insights or to review what to invest in right now in the UK, check out some of our handy area guides, including:

How Can New-Build Properties Save Money for Landlords & Tenants?