Why buy a new build?
There are many benefits to buying a newly built home - energy efficiency, low maintenance and a fast, straightforward buying process, with no chain.
- Choice - plot, configuration, kitchen and bathroom, fixtures and fittings.
- Peace of Mind - deposit protection, NHBC, new build certificates and warranties.
- Easy Purchase - no onward chain, no gazumping.
- Modern Standards - A or B energy efficiency, smart home technology, CAT5.
- Lower Costs - minimal maintenance, no repairs and renovations.
- New Community - Like minded new neighbours.
Many people like the idea of being the first to live in a property, that you may be able to choose the plot or unit that best suits you, and selecting fixtures and fittings.
You may need to wait for your new home to be built if buying ‘off-plan’. But choosing a plot and watching a building grow week by week can be very exciting.
All new developments must comply with stringent modern building standards and regulations for quality, energy efficiency and sound insulation.
They most likely include a comprehensive insurance warranty, covering major faults in design, materials or workmanship, giving you peace of mind that your new home has been built to the highest standards and will be covered for any problems. There may be an NHBC’s 10-year warranty, other companies provide warranties and insurance such as BLP’s housing warranty insurance.
As with any property you need to take a good look for yourself, don’t just rely on the marketing materials, depending on the build stage there will be a show suite or actual show home, have a good look around and ask any questions that come to mind.
We always advise our buyers to take a good look around the neighbourhood to get a feel for what it may be like to live there too. Try different times of the day and week. Consider local amenities and travel links. If it’s a large site you may be able to talk to new homeowners and ask how they are enjoying their new homes, explain you’re thinking of buying one.
Yes, you may be purchasing “off-plan” – effectively buying it before it’s been built. This is not as daunting as it may seem and with guidance from the salesperson, you should soon be able to visualise how your new home will look, even if a show home or opportunity to visit the site is not available at the time of reservation.
Ensure you take time to study the site plan and consider exterior factors such as the aspect, location of parking spaces or site amenities such as communal gardens or children’s play areas and parks. And if you are paying extra for a balcony or a larger garden which direction is it facing?
There will be opportunities for you to view the progress of the development, they will be arranged via your sales contact but it is worth noting that it will only be when the site manager advises it is safe to do so, and will typically be when your property is near completion.
There's no onward chain, no waiting for the seller to move or worse withdraw. The purchase is more structured with guided time frames.
The process for buying a new build home is similar to buying an older property; however, it is more structured and subject to defined deadlines to exchange contracts (usually 28 days), and of course, there’s the benefit of no chain.
Ensure you understand the requirements, from paying a deposit, to exactly what’s included in the purchase price, to completion dates. But in many respects, it is simpler.
As with buying a resell property, there may be an opportunity to negotiate. Find out what other properties on the site have been sold for if possible.
Shop around for good deals. Many developers offer incentives to differentiate them from other local developments, such as free furnishings, a parking space, or paying your legal fees. If you can’t negotiate money off the price, the common offer to pay your stamp duty is probably the best deal to negotiate.
You will need to liaise with your financial advisor as to when is best to apply for your mortgage.
It shouldn’t present any problems as High Street lenders are familiar with the process and potential timeframes. There may however be an issue around how long your mortgage offer is valid, most are only valid for six months. If the build is delayed due to unforeseen circumstances like the great British weather and it isn’t going to be ready within that time you may be able to get the lender to extend the offer. But in most cases, your mortgage application will need to be re-assessed by starting your application all over again. A good financial advisor should be able to assist in all matters.
Recognising that new build projects can be subject to delays, some lenders have special new build mortgages, with a longer validity period that can be up to three months longer than their usual deadlines. Check with your mortgage broker as they will know the products which will remain valid for longer and how the interest rates and fees may differ.
Click here if you would like to speak to one of our independent (free) advisors.
Appointing a solicitor to take care of all the legal paperwork - 'conveyancing', should be done within 2 working days of reservation to ensure a quick and smooth purchase process. Be sure to advise your chosen conveyancer you are purchasing a 'new build' on instruction as there are legal implications for new properties to be taken into account when quoting fees and confirming time frame requirements.
Will it be a 'Freehold'? If you own the freehold, it means that you own the building and the land it stands on outright, in perpetuity. It is your name in the land registry as “freeholder”, owning the “title absolute”.
Or a 'Leasehold'? Unlike a freeholder, as a leaseholder, you own the property but not the land on which it is built – that is owned by the freeholder. Ownership of your property is also for a set period, which can be decades or centuries, depending on the length of your lease. There will also likely be 'management charges' and 'ground rent' to consider.
All of these matters will be studied and discussed with you by your conveyancer, leasehold purchases do therefore require more work and this is likely reflected in the conveyancing costs.
We try to use plain English wherever possible, but there will be a few terms, and abbreviations that you may not be familiar with.
Here's a list of common words or phrases that will come up when buying a new build.