29th September 2023

What do you need to consider when buying a new build home?

Scott Battram

Senior Associate

Moving into a brand-new home with everything exactly as you want it is an attractive prospect. It is made even more appealing when you add in the various schemes, offers and additional extras house builders are currently offering. However, buying a new build is not always as straightforward as it seems, so what do you need to know?

For a solicitor, it is a minefield of complex legal documents that we have to ensure the developer and their lawyers and agents have complied with. However, the end result can be something quite special.

Here are some points for you to consider:

Is it wise to buy off-plan?

This is always a question of what is right for you, and whether you like a new, fully finished property. The government continues to drive the construction of new properties, so you must assess if it is right for you and your current situation.

Buying ‘off-plan’ (purchasing a property that hasn’t yet been completed) can potentially save you money and, if early enough, you can reserve the best plot, but you will need to be careful. Not only are you buying something you haven’t seen, but mortgage offers usually last for six months, so your offer could expire before your home is finished. Additionally, the prices of property can go up and down while you wait.

Some developers may not ‘list’ the property as being open for sale until they have a better idea of the completion date to reduce the risk of your mortgage offer expiring.

Further to this, if you are planning on moving from your current home to a new build, it is incredibly difficult to marry up the sale of your current home with the completion of the new build. It is therefore imperative that you have contingencies in place, and that the developer is aware and prepared to potentially make allowances in timescales for exchange and completion.

Understand your plans

Make sure you understand where your property’s boundaries are and who is responsible for maintaining the surrounding land. Also, look at the aspect of the property; in that it is always beneficial if able, to view the site or look at a site model/Google Maps to see what is currently there and what will be there. Also, confirm who owns or shares the access routes to the property (for example, your driveway or the path to your front door).

Similarly, find out if there are any sewers or drains included in the property as you will be liable for providing access to these should they require servicing or repair.

Do you understand the service charge?

Many new developments include service charges and additional ground rent, and these can add up to thousands of pounds a year. Confirm whether there are any service charges and make sure you can afford them in addition to your mortgage payments before you proceed with your purchase. This is not just applicable for those within flats, but also those who purchase houses where you have to contribute towards the maintenance of the estate through an estate charge.

What is the snagging process?

Unfortunately, new-builds are rarely problem-free and you are unlikely to get the perfect property right away (apologies, but it’s true). Arranging a snagging survey before you move in to identify any cosmetic and/or structural flaws, is the best way to ensure that any imperfections will be dealt with by the developer within a reasonable period of time. There will be a cost involved but it will be a fraction of what it could cost to put major problems right further down the line.

The show home isn’t your home!

Show homes are designed to help you visualise how your home could look, but they will be finished to the highest specification. Make sure you understand exactly what is included in the purchase of your home. Be wary that replicating the lighting, furniture, and other added extras you’ve seen in the show home will rapidly increase the cost of your purchase. It is always worth noting that every new build contract will enable the developer to make alterations to the specification, but this should not materially affect the look or value of the property.

Is your builder signed up to a warranty scheme?

A warranty scheme protects you (and your deposit) if your builder goes out of business before your property is ready. It also ensures that your home meets the agreed standards and help you resolve any disagreements between you and your builder. Before you put your deposit down, confirm your builder is part of a warranty scheme like the NHBC Buildmark.

Familiarise yourself with the Consumer Code for Home Builders

The Consumer Code for Home Builders protects new build buyers from a range of potential pitfalls, including unrealistic and unmet completion dates and unreasonable delays to your completion date.

What else can you get for free?

Developers are always keen to sell, so you may be able to persuade them to add some extras to close the deal. This is perfectly normal, and your builder’s sales team won’t be offended if you ask. After all, they can only say no!

Lastly, what if I am buying this for an investment?

Sadly, no one has a magical crystal ball, but it is unlikely that the market will become flooded with new builds, as sales have dropped across the property market. You will need to make sure your finances are in order and be mindful of the current rental market and the potential return on investment in the long run.

Next steps...

So, if you are looking to purchase a new build property, or have even placed a reservation fee with a developer and now looking to instruct solicitors then please do contact Scott Battram from our Property Team.

Scott has a huge amount of industry knowledge having acted for large-scale and small-scale developers, been selected as a panel solicitor for buyers, as well as acting on the purchase of an array of bespoke new build properties.