Are new builds still a smart investment in the UK property market—or should you avoid them altogether?

Hi, my name’s Tony Law, and this is a question I get asked a lot. Especially by people who are time-poor, or who have a decent lump of money sitting in the bank and want to “do something” with it.

And I get it—new builds can seem very attractive. They’re shiny, modern, low-maintenance, and often come with a 10-year NHBC warranty. Plus, agents love to throw out sky-high rental yield promises that sound almost too good to be true.

But here’s the thing… for most investors, I don’t think new builds are the best option. And in this blog, I’m going to explain exactly why.

The Real Problem With New Builds
For me, the core issue with new builds is simple:

👉 They make it incredibly difficult to pull your money back out of the deal—so you can reuse that same pot of money on the next property.

Why is that?

1. You Can’t Add Real Value
New builds are already finished, polished, and optimised. The developer and architect will have squeezed every last inch out of the available space. You’re unlikely to be able to:

Add an extra bedroom

Convert the loft

Split it into two flats

Extend into the garden

In short, you’re buying it “as-is”. There’s no value left to add. And if you can’t add value, you can’t refinance at a higher valuation to pull your money out.

2. You’re Usually Paying a Premium
Even if the agent tells you you’re getting a “discount”, you’re still probably paying a premium price—because of all those shiny features and new build benefits.

And let’s not forget: estate agents are phenomenal salespeople. If they’re quoting you a 7% yield, ask yourself—where’s that number coming from?

Be Wary of Quoted Yields
One of the biggest traps with new builds is the promised rental yield.

Agents will often claim yields of 6%, 7.2%, 8%, or even more. But in my experience, those numbers are:

Based on best-case rent with zero voids

Exclude or downplay key running costs

Not always backed by actual demand at that rental level

If you’re basing your decision on these yields, be sure to do your own due diligence:

Check actual rental listings in the area

Ask yourself if those rents are realistic

Run a dummy advert to test the market

Question any “guaranteed” yield—because if the company offering it goes bust, it’s often worthless

This might feel a bit cheeky, but remember—this is your hard-earned cash we’re talking about. You’ve got every right to be cautious.

So… Can New Builds Ever Work?
Look, I’m not saying all new builds are bad investments. There are a few scenarios where they can work, such as:

✅ Serviced Accommodation in High-Demand Areas
If you’re in a strong short-term let market (and have done your homework on local regulations), some new build flats can pull in great nightly rates.

✅ Buying in Bulk
Here’s a bit of an extreme one—but if you’re in a position to buy multiple new builds (e.g., a block of four or six units), you might be able to negotiate a substantial discount direct from the developer.

If you also own the freehold, this can open up other income opportunities too. And believe it or not, larger transactions like these are sometimes easier to fund—but clearly, this isn’t a first-time investor kind of deal.

What I’d Do Instead
If it were me—and I only had one pot of money to invest—I’d be looking for something a bit more hands-on:

✅ A tired old freehold house
✅ Within about an hour of where I live
✅ Bought at a great price
✅ With room to add real value (extra bedroom, layout changes, extensions, etc.)

After refurbishing and adding that value, I’d then refinance the property, pull my money back out, and go again.

This is the Burr Strategy (Buy, Refurbish, Rent, Refinance, Repeat). And if you’re not sure how that works, I’ve done a whole video on it [linked here in the description].

Final Thoughts
To sum up:
If you’ve got unlimited cash and you’re looking for a hands-off investment, maybe a new build could work for you.

But for most investors, especially if you’re relying on one pot of money, new builds just don’t let your money work hard enough. You can’t add value, you’re probably paying a premium, and pulling your cash back out is very unlikely.

If you found this helpful, I’d love it if you gave this video a thumbs up—and please consider subscribing so you don’t miss future content that could help you on your property journey.

Thanks so much for reading, and I’ll see you in the next one.