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Buying a New Build Property

Posted on Friday, 4th May 2018 by

Buying a new build propertyBuying a new home may seem a much easier option for you than buying an older property.  There’s no to-ing and fro-ing with the Estate Agents on viewing times, you’ll see show homes beautifully laid out, with furniture that fits (watch out!) and no embarrassing situations where a homeowner is hiding their dirty underwear as they show you around.  It’s simple, and clean and you’re the first one in!  They may even offer a part-exchange your current home (if you have one).

It can be a great experience, it’s likely that repairs and redecoration won’t cost you much in your first few years and if built to the correct standard, you can enjoy lower running costs and energy bills but make sure you’re in the picture of everything that’s involved before you go browsing.

Have a budget – Can you afford a New Build Property?

  • If at all possible it is better to have an idea of what you are going to be able to afford BEFORE you go looking. What sort of a deposit are you going to be able to put down?  Have you got this now or are you having some help from Mum and Dad for instance?
  • Get an idea of the amount you may be able to borrow from an online mortgage calculator – then you can be one step ahead to be able to secure a mortgage offer in principle when the time comes
  • Are you eligible for Help to Buy Assistance if you are a first time buyer? If you are selling, do you have an amount in mind that you are prepared for so you can assess the feasibility of any part-exchange offers that might get offered.

House Developers often have a strict 28 day completion deadline so the more work you can do in advance the better this will be for you if you do end up choosing a new build property.

Find out what’s included

Before you get sucked into the romance of perfectly matching furniture and immense fitted wardrobes, find out what would be included in reality.

Ask to see the full specifications for the property as well as landscape drawings and electrical plans. It’s worth visiting completed developments from the same developer (especially if you are buying off plan) to make sure you’re happy that their estates meet your expectations.

What’s included in the price?

  • Fixtures and fittings? – i.e. wardrobes and carpets
  • Appliances? – might include washing machine, oven, dishwasher
  • Stamp duty? – some developers will cover this as an incentive to make the sale

Once you know what it included, you could be in a better position to negotiate non-included items into the price when you get nearer to decision making and they are keen to close the deal.

Try to be objective

Show houses are painstakingly prepared by the Developer’s interior designers to sell you the lifestyle that they think fits the property you are looking at.  And this is great, and much better than looking at an empty house you may argue.  But be careful.  Will you be having the same matching furniture as they are showing it?  Do you need a bigger dining room table than the one that is presented?  Is the double bed in the bedroom actually double or a three quarter size to make it look bigger?  Is there adequate storage and if not, is there plenty of room to accommodate your wardobes if you can’t afford to have their fitted wardrobe option which is very often extra.

Don’t use the developer’s solicitor or conveyancer without at getting at least one more quote.

The selling point from the developer’s perspective is often that using their recommended solicitor with simplify the transaction and make it quicker.  Not true.  Developers will receive a commission for the referral of conveyancing work which means you pay more.  So keep your options open.

Make sure you shop around for new build conveyancing quotes so you receive the service and price that suits you.  The conveyancing process for buying a new build home is not quite as straightforward as other conveyancing but as long as you specify that you are buying a new build, a solicitor should quote accordingly to include;

  • Compliance checking against planning regulations
  • Checking NHBC inspections are made
  • Future planning for grounds maintenance

Your chosen solicitor should ensure that the contract is favourable for you and should not bend under pressure from the developer if there are conveyancing issues.

If you need some free conveyancing advice or a quote then get in touch.

Reserve the plot you want

Once you have made a decision on the plot you would like then it is common practice to pay a reservation fee to ‘reserve’ the property for a set period.  This is then deducted from the final sale price on completion but is usually non-refundable if you can’t exchange for whatever reason, or need to pull out.  Another reason to make sure you have your finances in place before you sign up.

Pay the deposit

As with all property purchases, you will be asked to pay a deposit (which would usually be a minimum of 10%) upon exchange to the developer’s solicitor.  You are at this point signing a contract to agree to buy the property at the agreed price and to pay the balance at completion.

What protection will you get?

Check that the developer offers a warranty against their firm going insolvent, against defects in the first 2 years and structural issues within 10 years.  This means that if there are issues within two years such as a leaking roof because the tiling has not been completed appropriately then the developer is obliged to fix them.  Within the period of structural warranty the developer is only responsible for issues such as foundations, render, roofs and load bearing floors.

The inevitable snagging list

Nothing is perfect, and as such your solicitor should ensure that there is a snagging provision in your contract as you’re purchasing a new build.  A snagging list then practically means that a list of issues including cosmetic and structural are detailed and passed to the developer for repair.

The best time to carry out a snagging survey is before the final payment is made on the property to ensure any issues arising are not disregarded as wear and tear from you moving in / living there. However the developer is responsible for all remedial defects which occur within the first two years of purchase.

And lastly, enjoy looking.  Take your time, it’s probably one of the biggest purchases you will make in your life so don’t be afraid to spend a lot of time in the show homes, ask lots of questions, however trivial and visit other new builds and perhaps non new builds just to check you are getting what you want from it.

Happy hunting!

 

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The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.

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