Buying a new build property – tips and advice

More new homes are being built in the UK than ever before, and a record number are needed. Buying a new build property is popular with first-time buyers and people starting a family, and there are significant benefits to buying new. But there are lots of things to be aware of before deciding that new is for you.

What is a new build?

A new build property is one that has not been lived in before – it has been newly built and is on the property market for the first time.

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Why buy a new build home?

Buying a new build has many benefits. As everything about it is new – the roof, the guttering, the plumbing and electrics, the kitchen, the bathroom – there should be no hidden costs. Nothing will need to be renewed or replaced when you move in. Plus, a new build has to comply with the latest building regulations, so will have the highest energy efficient ratings, bringing savings and the possibility of ‘green’ mortgages.  

Other benefits could include:

• The possibility of stamp duty savings from developers and other incentives
• Eligibility for Help to buy and shared ownership schemes
• Buying off plan
• Chain free
• New build warranty

What’s included in a new build property?

One of the great things about buying a new build is that the property will often come with many of the fixtures and fittings that you would otherwise have to purchase. Most new builds will have fitted kitchens with integrated washing machines and dishwashers, and some will include furniture too like sofas and dining tables.

What you are fairly certain to get are the most energy efficient windows, doors, insulation and heating systems, because of the standards developers have to meet with a new build property.

However, always check with a developer about what is included in the purchase price.

Top tips when buying a new build

Compare pricing and negotiate

To purchase a new build it is always advisable to negotiate over price. Prices of new build properties are likely to be at the higher end of the market, but there is pressure on a developer to sell – so they can be open to negotiation. Look at other developments with similar properties. If the property you want is more expensive, ask your developer why, and if they will reduce the price?

Get to know the developer

Build a good relationship with the developer of the property you want to buy. It can be a long process to completion. They are more likely to be flexible on price and other issues if you have a close working relationship with them.

Watch out for new build warranties

New build properties will come with a warranty, and these usually last 10 years. They cover all defects arising from the build and are the developer’s responsibility for a two year period. From year 3-10 the developer will only be responsible for major structural issues such as the foundations, roof and chimney.  Be wary of what is and not covered by your new build warranty.

Understand whether your new build is leasehold or freehold

Most new build flats are sold as leasehold properties, but there have been instances where new build houses have had leasehold tenures. However, it is now illegal to sell a new build house as leasehold.

You must find out if you own the freehold to your property; if you don’t, you could be liable for increases in ground rent in the future, as well as fees for licences and permissions. Consult your solicitor if you are unsure about the tenure of the property.

Be prepared for delays

The show home might blow you away and convince you to put in an offer, but you could have a long time to wait until your property is built and ready to move into. Much could happen in the meantime – the developer might hit financial problems, and construction could slow down or stop. The building site may be identified as being of archaeological interest, or there could be a public health crisis – so be prepared for delays. Your costs could rise, so make sure you can cover unforeseen circumstances.   

Check workmanship and finish of your property

Just because a building is new does not mean it is perfect. Once your home is built, before or after completion get a snagging survey undertaken by a professional inspector. They will identify any work that is sub-standard or does not comply with building regulations, and provide advice on any remedial work that needs doing. Under your new build warranty any defects raised in the first two years will have to be rectified and paid for by your developer.

Continue relationship with developer after completion

It is important to stay on good terms with your developer after you move in. Your new build warranty means that the developer is accountable for problems with the property for a further ten years.

Getting a mortgage on a new build home

Mortgages on new builds are not as straightforward as on standard properties. Mortgage lenders are less willing to provide high loan-to-value mortgage offers, because the devaluation potential for a new build is much greater. Most will not go higher than 85% LTV for a house, and 75% for a flat.

There is also the issue of buying off plan, which brings with it a much longer lead time until completion. Standard mortgage offers are valid for six months, but your build could take longer than this. You may have to reapply for your mortgage, but some lenders will offer special extensions for new build applicants, perhaps three months longer than a standard mortgage.

On the plus side, buying a new build could open the door for a ‘green mortgage’, which some lenders will offer to buyers of properties with high energy efficiency ratings.  They can offer discounted interest rates or cashback if your home has an EPC rating of A or B.

Part exchange on a new build

If you don’t want to be part of a chain, you can sell your property to the developer in order to fund your new build purchase. Part exchanging means that your sale can’t fall through, and you have the security of knowing that you aren’t under any pressure to move out of your existing property until the new build is ready.

The developer will provide two valuations of the property you want to trade in, but the offer they make will be lower than you would probably get on the open market. It also has to be worth 65% of the new build property value, and be subject to a survey. If there are structural defects the lender may withdraw their offer.  

Is a new build right for you?

New builds have many benefits, but won’t be for everyone. They are energy saving, low maintenance properties with a warranty, and depending on your circumstances could be your only way to get on the property ladder.

But they may suffer from low quality workmanship, be smaller than older properties and have leasehold tenure, and have a premium price. There could be a long wait before you can move in.   

Contact your local haart branch for help with your new build search

Thanks to our bespoke advisory, land sourcing, planning and sales and marketing service, haart has numerous instructions from new build developers across the country, so contact your local branch today. We can help get you started on your hunt for a newly built home.