Does your investment portfolio suffer from too much ‘home bias’? It’s natural for investors to stay cl

Are you thinking of buying a new build? The good news is there are more regulations than ever that protect buyers of newly built homes. It can be difficult to keep up with these changes, so here’s what you need to know.

Codes of conduct

Most developers are signed up to a code which lays out best practice for the marketing, building, and selling of new builds. Check which code your builder follows, so you know who is holding them to account if any issues arise. Many developers were signed up to the 

Consumer Code for Home Builders until 2021, when the New Homes Quality Board (NHQB) was launched.

 The guidelines

Transparency is at the forefront of both the Consumer Code for Home Builders and the New Homes Quality Code from the NHQB. Consumers have the right to withdraw from the purchase if the housebuilder makes any changes to the home. Deposits must be protected and high-pressure sales tactics are prohibited to protect vulnerable customers. The housebuilder must also provide an after-sales service for up to two years after legal completion.

 Check for snags

Defects with the property – otherwise known as snags – are a common problem with new builds. Buyers can commission a professional snagging company to inspect the new build before they move in. If the developer is registered with the NHQB, they are required to rectify any snags within 30 days, unless there is a suitable reason for delay.

 Complaints procedure

Each code has a process and timeframe for the handling of complaints. The New Homes Ombudsman Service is free for anyone whose developer is registered with the NHQB. Meanwhile, issues with housebuilders signed up to the Consumer Code for Home Buyers can be taken to the Independent Dispute Resolution Scheme.

 *As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments

ose to home when thinking about investing, contemplating well-known UK companies or UK-focused funds rather than looking further afield. But if your portfolio becomes too heavily concentrated in the UK, you risk missing out on valuable diversification benefits and better potential returns elsewhere.

The drawbacks of home bias

One of the biggest reasons to avoid home bias is that it limits your portfolio’s growth potential. Investing with a global perspective opens up your portfolio to a world of different countries, industries and companies to invest in, potentially leading to higher returns over time. Importantly, investing globally means you’re more likely to gain exposure to high-growth sectors or companies that are not always present in your domestic market, whereas sticking with the UK means narrowing your opportunities, even if you own some outstanding local companies.

The benefits of diversification

At the same time, home bias in a portfolio breaks one of the biggest investment rules: diversification. Spreading your portfolio across different asset classes, countries and companies is one of the simplest – yet most effective – ways to mitigate risk within your portfolio and help you achieve more consistent returns over time. Studies and historical data show that including international investments in a portfolio can lead to better risk- adjusted returns due to diversification benefits, though geopolitical risks must be considered. Global markets offer a wider range of asset classes and reduce your vulnerability to economic downturns specific to your home country.

However, over-diversification is a risk to be wary of too! It occurs when additional investments diminish returns without lowering risk significantly. Regular reviews and rebalancing help maintain a well-diversified portfolio and manage any potential concentration risk that may occur over time.

Ready to invest? 

Recent research suggests that some Britons are starting to save more despite the cost-of-living crisis (Aldermore, 2024). Now might be the right time to start thinking about investing if you have some money on the sidelines.

Get in touch with Audley Wealth today – www.audleywealth.com/contact-us

*The value of investments and income from them may go down. You may not get back the original amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.