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Guide to Buying a New Build Home

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Buying a new build home? Here’s a handy guide. We take a look at everything from solicitors to mortgages to help the process go as smoothly as possible.

Steps to Buying a New Build Home

In many ways, buying a new build house works the same way as buying any other type of property. Let’s go through it step by step.

  1. Find a property that’s right for you
  2. Ensure all your finances are in order
  3. Get an agreement in principle
  4. Pay the developer a reservation fee
  5. Find a solicitor
  6. Secure your mortgage
  7. Put together a snagging list
  8. Exchange contracts
  9. Complete

However, despite the similarities, there are a number of common questions around new builds.

It’s important to bear in mind that things can vary. Even though the property is chain-free, buying a new build house timeline can be altered dramatically. Avoid delays by keeping communication open and staying on top of paperwork.

What is a New Build?

A new build property is fairly self-explanatory: it’s one that is brand new and never lived in before.

Many people choose to buy one because:

  • Less maintenance (particularly when compared to an older property)
  • Better insulation (often meaning lower energy bills)
  • Good chance of a profit when selling
  • They like the idea of being the first to live there
  • Guarantees e.g. NHBC’s 10-year Buildmark
  • Lower repair/redecoration costs (at least in the beginning)
  • Appeal of a modern property
  • More freedom when it comes to design (especially if buying off-plan)
  • No property chain
  • Easier for first time buyers thanks to government schemes e.g. Help to Buy

Should I Buy a New Build?

This depends on your individual circumstances – property is a huge financial commitment. Getting to grips with how the process works is the first step, so let’s delve into some more detail.

How Much Could You Borrow?

New Build Mortgages

One of the first steps is to get a mortgage in principle.

A common issue with new builds is difficulty getting a mortgage approved. This doesn’t happen to everyone, and it’s usually only if the house hasn’t been built yet.

This is why it’s important to speak to a mortgage adviser and get to know your options.

If there are delays in construction, your provider might withdraw their offer. However, many have been known to provide new build mortgage offer extensions.

Mortgage Quotes

Can You Negotiate New Build Prices?

It’s always worth trying to negotiate with your developer.

Get a feel for how much similar properties on the development sold for. This will give you an idea of whether there’s any wiggle room on the price.

It won’t always be possible, but it’s worth doing your research to find out. Particularly towards the end of your developer’s financial year, you might be able to snap up a lower price.

Even if you can’t haggle on the asking price, you could try negotiating a better deal with your developer. This includes:

  • Stamp duty paid
  • Legal fees paid
  • Free furniture
  • Parking space

New Build Conveyancing

New build or otherwise, the conveyancing process is complicated, which is why it’s essential to use a professional to help guide you through it.

Your developer may recommend someone, but you don’t have to use them. The choice is entirely your own. Get a conveyancing quote as soon as possible to ensure you find the right person for the job.

Find a Solicitor

Your solicitor will deal with all the paperwork and ensure you’re protected every step of the way.

New Build Home Insurance

Your new build might well come with a guarantee, however, it’s vital you read the small print. Most of the time, this only covers issues relating to work done by the developer, such as poor tiling.

So, if there was a flood or another kind of accident, you wouldn’t be covered by this guarantee. Therefore, it’s always worth taking out insurance when buying a house.

Home Insurance Quotes

When Do You Pay a Deposit on a New Build House?

A new build deposit is usually 10% of the asking price, paid before you exchange contracts.

If your developer is registered with a warranty provider, your deposit will be protected. This not only covers you should they go bust, but also allows you to withdraw from the purchase and claim a refund without penalty. This is usually only the case if there are unreasonable delays in construction.

Do You Need a Survey on a New Build?

One of the most common questions is whether you need a survey on a new build home. Many assume they don’t as the property has never been lived in before.

However, it’s always worth putting a new build snagging list together. Examples of ‘snags’ include ill-fitting doors and windows. It’s essential to be thorough here, which is why many choose to use a professional company.

Despite this, you can carry out the new build snagging survey yourself, to identify any defects before you move in.

Remember, just because a property is new, it doesn’t mean it’s fault-free.

New Build Completion Process

This works in very much the same way as with older properties. Ensure you’ve put your snagging list together before you complete, after exchanging contracts on a new build house. This means any repairs will be carried out before you move in.

The notice of completion on a new build will be issued by your developer, giving you a set amount of time in which to complete. You must be ready within this period, or risk losing the property altogether.

Therefore, make sure you have everything in order beforehand. Keep clear communication open with your solicitor to reduce the risk of delays. Dragging out the process could have consequences.

You can ask the developer to agree to a long stop completion date, which means they’ll pay you compensation if the property isn’t ready by that date.

Is Buying a New Build a Good Investment?

This entirely depends on the property itself, and its location. The area it’s in will play a pivotal role in whether it increases (or decreases) in value over the years. Consider whether there are any good local schools, and if there are any major building works planned nearby. A property report can tell you all of this and more, so get one before you buy.

Get a Property Report

Common Pitfalls and How to Avoid Them

Here are some of the most common issues homebuyers face when it comes to new builds:

Show Homes

It’s important to remember that the show home is just a rough guide, it doesn’t necessarily mean the final property will look the same.

Too many homeowners wrongly assume that it will, which often leads to disappointment.

What can you do about it?

Do your research into the developer and make sure you don’t look at their promotional material alone. Ensure you understand that marketing material can be vague, it won’t necessarily give you a clear idea of where you’ll be living.

Delays

It’s common, particularly when buying off-plan, for developments to take longer than expected. This can cause issues with mortgage providers and make the process drag.

What can you do about it?

Keep communication open and clear, both with builders as well as your mortgage provider.

Defects

Even if the property is finished on time, it doesn’t mean it will be perfect. Too many homebuyers fall into the trap of assuming their new home will be ready to move into once it’s finished.

What can you do about it?

Never skip the snagging process! Be as thorough as you can, leaving no stone unturned.

Building Site

If your home is one of the first on the development, you might find yourself living on a building site for a few years until other properties are completed.

What can you do about it?

Make sure you do your research and ensure you know as much about the development before getting involved. Speak to the builders and the developer openly, asking plenty of questions.

Settling In

It’s important to remember that everything will be new. This means certain features, such as the heating, might take longer to get working than expected.

What can you do about it?

Get organised as early as possible. You should also seek advice from others who have bought new builds.

Overpaying

Some new builds will be priced way above the average house price in a particular area, and it can be difficult to determine property value.

What can you do about it?

Carry out thorough research into the area, asking prices and whether you could get a better deal elsewhere. Don’t be pressured by the developer into paying more than you should for a property.

Top Tips for Buying a New Build House

You’ll want to make sure you’re getting the best deal. Remember, it’s your money you’re parting with!

Help the process along with these handy tips:

  • Start looking as early as possible to secure a better deal
  • Research the developer thoroughly
  • Find out how much of the development has been sold
  • Be aware developers may upsell certain fixtures and fittings – it might be cheaper for you to source them yourself
  • Look for ways to add value to the property
  • See what extras you can get thrown in
  • Make sure you know exactly what you’re buying e.g. what’s included in the price, freehold vs. leasehold
  • Research the area thoroughly

That final point is probably the most important in this guide to buying a new build home. It’s vital you’re sure you like the area you’re buying in.

Get a feel for the location before you commit to buying. Visit at different times of the day, walk around as much as you can. Plus, try and get a feel for what the local amenities and transport links are like. Every detail will have a major impact on how much you enjoy living there.

Remember, you can change many things about the property, but not its location. A property report can collect all the information you need to know for you, including crime rates and local schools. Snap one up to get to know your future area better!

Last Updated: October 21st, 2021