Why do new builds make good buy-to-let investments?

Key Takeaways

• Shiny, never-lived-in homes are highly sought after by prospective tenants.
• Landlords can charge premium rents due to tenant demand.

• Buying directly from the housebuilder means no seller chain.
• New builds can be completed faster, reducing void periods and allowing quicker rental income.

• No risk of sellers changing their minds or getting better offers.
• Reservation fees protect your offer from being gazumped.

• New builds meet stricter energy performance regulations.
• Lower utility bills for tenants due to efficient features.

• Everything is new, minimizing maintenance expenses.
• 10-year NHBC warranty provides peace of mind.

Why new builds make good buy-to-lets 

Popularity with tenants 

New build properties can make brilliant BTL investments. One reason for this is that shiny new homes that have never been lived in before are incredibly popular with prospective tenants. Therefore landlords are able to charge premium rents.

Added to this, it’s likely your property will be snapped up quickly, reducing void periods where your property is unoccupied and not bringing in any rental income. 

Speed of completion

Buying a chain free home means you’re not waiting on the seller to find a new home to move into before you complete. When purchasing a new home there is no seller chain because you’re buying directly from the housebuilder.

It’s estimated having no chain can shave eight weeks off the buying process. With the UK housing market moving fast, this is a considerable advantage of new builds. It means you could be moving tenants into your rental property much sooner - and receiving rent.

More certainty 

Around 20% of second-hand home purchases are cancelled. This could be because the sellers simply change their minds, get a better offer, or are scared off by a bad survey report. 

With a new home, these aren’t issues you have to contend with. Firstly, you’re buying directly from the housebuilder, taking the emotion out of the transaction. Plus, reservation fees protect your offer from being gazumped.

Energy efficiency 

New builds are also popular with BTL landlords because of their energy efficiency. A typical rental property must have an EPC rating of band E or better. However, stricter energy performance regulation from 2025 will require all rental properties to have a minimum EPC rating of C.

New build homes, including all David Wilson Homes’ properties, have an EPC rating of A or B, meaning that they easily meet this regulation. 

Thanks to thermally-efficient insulation, argon-filled double-glazing, efficient kitchen appliances, and showers that reduce the amount of water used, David Wilson Homes’ properties are up to 58% cheaper to run. So, your tenants could expect to save up to £2,600 per year on energy bills - another draw for prospective tenants concerned about rising fuel and water costs.

Low maintenance costs 

Maintenance costs on new builds are generally very low. As everything from the roof to the appliances and from the carpets to the light fittings is new, in the first few years, maintenance outgoings should be almost non-existent. 

Added to this, all new homes come with a 10-year NHBC warranty. This means you can rest assured your property meets strict design, materials and workmanship standards. Plus, if anything goes wrong, you’re covered by a 10-year structural warranty and a 2-year fixtures and fittings warranty. 

Compare this, for example, to a Victorian property which could have been built almost 200 years ago, and is likely to be expensive to upkeep and maintain. 

More choice

If you buy off plan, it’s usually possible to request changes to the layout and design of the property. This could mean choosing tenant-friendly finishes such as choosing washable paint and stain resistant flooring. 

Even if buying after the build has completed, you’ll be able to choose the new build that best suits your requirements. You’ll be able to view different style properties on the same development and choose a rental property with the number of bedrooms you desire. 

Looking to invest in a new build BTL property? Browse our new homes in buy-to-let hotspots, Manchester, Bristol and Cambridge.