A Guide to Buying a New-Build Home

New-build properties are a popular option for many people across the country, especially for first-time buyers.

Getting on to the property ladder is one of the greatest financial commitments you will probably ever make. That is why for this week’s Top Tip Tuesday we want to provide a comprehensive guide to help you snap up your very own new-build property. Whether you are using Help to Buy or have Shared Ownership, these tips should help you understand the whole process.

So, what are the benefits of buying a new-build property?

1. You can purchase the property before it is built

Many housebuilders and property developers offer properties off-plan. This means that you can choose your dream home before it has been built.

If you decide to buy off plan in an area where house prices are rising, you may even benefit from equity growth before you have even moved in!

2. You can build-in your own preferences

Some housebuilders and property developers allow buyers to choose the key design aspects of their new home.

This could range from doors, cupboards and plug sockets, to garden landscaping, tiling and event the colour of your kitchen worktops.

The earlier your reserve your new home, the more choices you will have. You may have to pay extra for some more personal modifications, so make sure you study the small print carefully.

3. New-builds are low maintenance

As the first occupants of this newly built property, you will benefit from not having to carry out repairs, maintenance or redecoration when you move in.

Any such work is likely to be unnecessary for at least the first few years of you living in the property.

4. Your home may be under warranty

If your new property is registered with the National Building House Council (HBHC), it will come with a 10-year warranty and protection scheme.

Any homes offered under the Help to Buy equity loan have to follow the Consumer Code for Home Builders.

The code requires housebuilders to register with the UK’s new build home warranty bodies including NHBC, Premier Guarantee, LABC Warranty and Checkmate.

These warranty bodies represent over 95% of the new homes built in the UK.

5. Buying a new-build property is chain-free and more flexible

If you are a first-time buyer or not selling another property then you are not part of an onward chain. This means that you can buy a new home at your own pace.

Being chain-free means that you can move in as soon as the property is ready or you can set a move-in date that works for you, without waiting on other buyers in an upward chain.

6. Bills are cheaper in a new-build property

New-build properties usually have the latest energy-efficient appliances, meaning that they are cheaper to run than other older properties.

Newer buildings also tend to be well insulated and double or even triple glazed, keeping the draughts out and heating bills down.

7. Safety comes as standard in a new home

Due to the high standards of building a property, all the top safety and security measures will be put in place at your new-build property.

These tend to include fire safety, locks on doors and windows, security lighting, alarms, gated entrances and entry phones in new housing developments.

What is the process of buying a new-build?

Find your property

Most new-build properties are sold off-plan. This means that they have not been built yet. You may look at a show home or be shown extensive plans of the property.

Off-plan properties have many advantages, including the opportunity to be involved with your new home from scratch. But, you may have to be patient.

Reserve your new home

Once you have found a development that you want to buy a home in, you will need to pay a reservation fee to secure the property.

The cost can vary however, it is usually around £1,000.

Organise the paperwork

Your next task as soon to be property new-build property owners is to appoint a conveyancer to deal with the legal side of your purchase.

It is also key at this point in time to lock in your mortgage. But, this is slightly trickier than with an existing house.

This is because mortgage offers typically last between three and six months.

It is important that you ensure your completion date is within the duration of the mortgage offer. Otherwise, you could find that the offer has become invalid.

Some mortgage lenders may provide an extension to the offer in the event of a delay. You can find mortgages that are specific to new-build properties that have more flexibility built in.

Waiting for your new-build to be ready

It can take anywhere from a couple of months to several years before an off-plan property will be available to move in to.

The short stop is the date that the developer expects to complete and the long stop is the date that the developer has to complete it by.

You should try and agree on a long stop completion date with your housebuilder or developer. This means that if the property is not finished on time, you will be entitled to compensation.

Getting ready to move

In the weeks before the completion date, your conveyancer will need to finish the paper work. You can then exchange contracts and pay your deposit.

Just before you move in to the property, it is a good idea to have a snagging survey conducted to check for any defects (you can also see our checklist below).

You can then move in to your brand new property, safe in the knowledge that if there are stains on the carpet it was you that made them!

How do I make sure my new-build property is up to scratch?

When you secure your new property, make sure that your contract contains a ‘snagging provision’. This is to ensure any minor issues, repairs or defects are completely covered after completion.

When your property is completed, make sure you carry out an inspection and alert your housebuilder or developer of anything that may need fixing.

Key things to look out for are:

  • Plumbing and electrics
  • Brickwork
  • Tiling
  • Walls, floors and ceilings
  • Glass
  • Paintwork
  • Plaster
  • Carpentry
  • Fitted furniture
  • Gutters

How risky is it to purchase a new-build property?

Any property sale carries a certain degree of risk. And it may feel particularly daunting paying out to secure a home that has not been built yet.

For this reason, there are some comprehensive protections for buyers in place. This includes:

New-build warranties

Many house builders and developers offer a warranty and protection scheme from the National House Building Council (NHBC).

More than 90% of new properties that are built in the UK are covered under warranty by NHBC, Premier Guarantee, LABC Warranty and Checkmate.

This sort of cover ensures that you can secure a mortgage and provides peace of mind. It can also potentially save you money on repairs in the long-term.

For example, a new home warranty of 10 years may include:

  • Pre-completion insolvency cover – This means that you are protected if your house builder or developer becomes insolvent once you have exchanged contracts to buy one of their properties.
  • Cover for the first two years of ownership – Your house builder or developer is responsible for rectifying certain damage.
  • Insurance for parts of your new home – Cover for specified areas of the property may include damage to the floors, staircases, drains and windows, from the third year of ownership through to the tenth.

Consumer code benefits

The Consumer Code for Home Builders exists to make buying a new-build property fairer and more transparent for buyers.

The code applies to all building firms registered with the UK’s major new home warranty providers.

The code is there to help you make an informed decision about buying a new property. Your contractors or housebuilders are then legally required to give you certain information.

They are also required to give you a transparent and easily understandable contract.

Your house builder or developer must inform you of timings of construction and completion dates.

You are entitled to a refund of your reservation fee if you encounter unreasonable delays. The code extends to an after-sales service too.

It also provides an independent and low-cost dispute resolution scheme. This will determine your house builder’s responsibilities without the costly process of taking your case to court.

What government help is available for new-build properties?

The good news is that the two biggest government buying schemes apply to new-build properties.

1. The Help to Buy equity loan is a government scheme that helps first-time buyers get onto the property ladder with a 5% deposit.

It is available on new-build properties, which can come at a premium cost. The property must be from a Help to Buy-registered builder.

2. Shared Ownership is a government scheme that offers you the chance to buy a share of a property from a housing association.

Because you only own a part of the property, you can buy it with a smaller deposit and mortgage. You will still have to pay rent and some fees on the parts that you do not own.

Developers offer incentives to buy their new-build properties

Some house builders and developers offer their own incentives to attract buyers.

These sort of incentives may include:

  • Paying your stamp duty
  • Paying your deposit
  • Free fixtures and fittings, white goods, interior design advice and landscaping
  • Cashback
  • Part-exchange deals, where they buy your existing home and sell it on
  • Assisted sale, where they help to sell your existing property

Such incentives help housebuilders and developers to hit targets.

We hope these tips helped! If you are looking to buy a property, why not visit our website today and discover your dream home!

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