Reserving your property
Ready to strike? If you feel confident that you’ve found the right home and you’ve secured a mortgage, it’s time to reserve a new build property.
You’ll have to pay a reservation fee, normally £500 to £1,000. If you back out of the sale at a later date, you’ll lose this — but if you go through with the purchase, it will be deducted from the total price. The reservation period is normally around 28 days, which should give you enough time to exchange contracts and solidify the process.
You can still negotiate on the price of your home, even if it’s a new build. Don’t be afraid to offer below the sticker price if you think that’s fair — you can always counter at a higher price if the developer says no.
The buying process
Appoint a conveyancing solicitor
It might sound intimidating, but a conveyancing solicitor is just a lawyer to help you with the legal side of buying a home. In fact, they do a lot of the legwork for you and make the process run smoothly.
Getting your mortgage
Time to work out your financing. If you’re worried about securing a mortgage for a new build, as we mentioned above, there are a few schemes that can help you — especially if you’re a first time buyer.
The Help to Buy equity loan and London Help to Buy scheme are both aimed exclusively at new builds and can help those who can’t save a big enough deposit to get onto the property ladder. You’ll have to put down a 5% deposit — but the government will lend you between 15% and 40% of the purchase price, depending on where you live.
A lot of new builds also offer shared ownership schemes, which can be a great first step if you can't afford to buy a home outright. It lets you buy a portion of the home and pay rent on the remaining share.
Paying your deposit
While a traditional deposit is normally 10%, with a newer property you could need more. Normally, the developer will request anywhere between a 10% and 30% deposit, with an agreement to pay the remainder upon completion. They’ll also normally want proof from your lender that your mortgage is guaranteed.
Exchanging contracts
Exchanging contracts is when it all becomes official — you pay your deposit, which you can lose if you back out after this point. Normally you only have 28 days between reserving your home and exchange, so this process can come around fairly quickly.
A good solicitor will pull out their fine-toothed comb and make sure everything is OK on the legal front and that the developer has followed all of the necessary regulations.
Normally there are new build warranties, like NHBC or Premier Guarantee, to protect your deposit after the exchange if anything goes wrong with the building development. Your lawyer will be able to talk you through it.
It’s your new home, you paid for it — so it should be picture perfect."
Check your property before you move in
Time to give it one last check. You can do this yourself, but a lot of people opt to have a “snagging survey” done, to see if there are any last changes you need the developer to make. Often this will be something small, like fixing plaster or skirting boards. A snagging survey usually costs between £300 and £600, but it can prove very much worth it if you find repairs that need to be done.
Things to look out for
1. Warranties
Most new build homes come with a 10-year NHBC warranty, which should cover any major structural defects. The only drawback is that trying to resolve any issues through this warranty can be a lengthy process. So on top of that, many developers will give you a direct warranty for a shorter period — often two years. Make sure to keep an eye out for what warranty they offer and what is (and isn’t) included.
2. Premium pricing
A lot of the time, developers will have a very savvy sales team with targets to meet — so they can be very pushy about pricing. Make sure that you’re actually getting a good deal and paying a fair price.
Also, be wary of extras thrown in — sometimes new builds will offer to cover stamp duty or legal fees, as well as throwing other perks your way. These can be a nice bonus, but you have to be savvy.
Though they may sound great, but if those costs are built into an overly high price then you’re not really getting that great of a deal.
3. Leasehold vs freehold
One key element of buying a new property is whether it’s leasehold or freehold. Traditionally, new build flats will be leasehold and houses will be freehold — but you should always check.
If it’s leasehold, you will have to pay ground rent to the freeholder and you may have limitations on changes you can make to the building. Your solicitor will be able to make sure there aren’t any unfair restrictions before you exchange contracts.
4. Moving in delays
The short and long stop dates will both have been agreed upon earlier in the process, but it’s good to keep an eye out for what recourse you have if the developer doesn’t hold up their end of the bargain.
Your estate agent and the developers should be able to keep you up to date throughout the process, but it always helps to know your rights.
If you do find that there's a delay, be sure to say something — especially if it goes beyond the long stop date.
5. Workmanship and finish
Finally, it’s all about those little details. Is the workmanship up to scratch? Are all of the finishing touches what you agreed upon? This is where your snagging survey can really help make sure you’re getting what you paid for.
Don’t be afraid to be nit-picky about the little things, whether it’s a tap or a light fixture that doesn’t look quite right. It’s your new home, you paid for it — so it should be picture perfect.
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First-time buyers guide
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