Buying a new build home is different to buying an existing home – and the good news is that it’s often much easier and can be a lot quicker too!
That’s partly because most developers are essentially professional sellers. They typically know which legal company they are using, have collated all the legal documents required to sell a home, and they are likely to work with one that can work quickly and efficiently.
In contrast, when legal companies act for a seller of an existing home, they are reliant on them having all the right paperwork and often have to chase for information or speak to third parties such as planning or window companies to secure what's required.
This can add months to the time it takes to buy and sell, and, in some cases, requires buyers to take out insurance in case a problem becomes an issue for them when they become homeowners, due to missing planning or building regulation documents.
When buying a new home very little of this is required as long as the developer you are buying from is ready to sell.
The other bonus of buying a new build is that, unlike an existing home, a well-built new build property has:
1. Everything is documented about how it’s been built.
2. What materials have been used.
3. Safety certificates for electrics and gas
4. Warranties for the new build
Other advantages include:
1. Typically have EPC ratings of B+, which means lower energy bills
2. Built to current regulations and safety requirements
3. Some flats will also have improved leasehold agreements, for example, 999-year leases and zero ground rent.
Buying a new build currently offers great value, as the premium for buying new against the resale market is at an all-time low, therefore offering budget conscious buyers peace of mind with lower maintenance and running costs.
Finally, you won’t have to worry about being in a chain or about problems on completion day either when the seller doesn't move out on time!
There are three ways to buy a new build property:
Buying off plan
This can be a fantastic way to buy a new build as you are getting in ‘early’ on the development. It can often mean you get the pick of the best plots, but also you may be able to ask for some of the build to be tailored for you such as flooring and even kitchen and bathrooms.
However, it is important to note that if you are buying off plan, there is the risk that it’s not completed on time, or you end up paying more for the property if the market falls since your offer is agreed.
If, though, you are planning to live there for a long time and can be flexible on when you move in, these risks may well be worth it, and of course, the market may go up, and they may actually be ready on time too, so you could end up getting a really good deal.
Custom Build
This happens abroad a lot, but it is starting to happen in the UK too. Custom build is similar to buying off plan, but you get more choice. Essentially, the way it works is you buy a plot of land from a developer, which has all the services and planning permission in place. You can then either build the planning approved properties yourself, engage your own build team or the developer will build it for you.
The developer will usually have secured approval for several different types of properties for you to choose from. You can often change the internals of the property too, for example if it’s a four bed, but you would prefer a three bed with larger rooms, that could be accommodated.
Be aware though, as with buying off plan, you would need specialist finance and delays can occur.
Buying a ready to move into new build
This is the way most people would buy a new build home and one of the most critical checks to make, even before you visit a property is how well the developer scores on the House Builders Federation Customer Satisfaction Survey.
This is an on-going check with people who have bought from a developer and you can check their scores overtime and also find out more about how the survey is carried out, so you can see it’s independent.
If your developer doesn’t input into this survey, you might want to ask them what independent verification they have of the quality of their new builds and post build customer service – you can check online too as people will often be quick to complain about a developer if they have had problems!
Check your developers rating here.
Find out more about the survey here.
New builds have come a long way and are now built to much higher standards than many people expect. Developers are also putting more thought into how homes feel to live in – whether that’s creating a real sense of community or making sure a development fits in well alongside existing homes.
For buyers, there are some practical benefits too, from lower energy bills and modern safety features to up-to-date technology. And because there’s usually no chain, the moving process can often feel more straightforward.
Even if you’ve dismissed new builds in the past, it’s worth taking a look at what’s available locally – if only to help you compare them with the other homes you’re considering.
Key steps to buying a new build
Because buying a new build is different to an existing home, there are different steps to take, so here’s a list of what you need to do and things to watch out for.
1. Sort your finances first. Visit a broker such as Mortgage Scout who understands the new build process – for off-plan or custom build as you are likely to need specialist lending.
2. Check what schemes and incentives are available for buying a new build. Some will offer to pay your stamp duty land tax or part-exchange your existing property. There is even a ‘rate reducer’ offer where the developer pays a percentage of the property’s value to the lender, which can reduce your mortgage costs.
3. Find a legal company that can represent you, ideally before you start looking for new builds. The developer may recommend someone, do make sure though, they have bought with new build transactions before, as the contracts are very different to selling an existing home.
4. Find some new build properties to visit, but do check the developer's rating on HBF or research to see if they have received any complaints online. Often local papers will cover issues developments have had, so find a previous site they have built and see if there were any problems reported.
5. If buying off plan or via Custom Build, check a new build site that the developer has already built. It’s worth a visit in person and if you can, chatting to some of the owners!
6. If the property is already built, check the finishings – are the light switches straight? Is the property decorated well? Can you hear the floorboards upstairs creaking if you are downstairs, or worse, someone’s flushing the loo!
7. Check what you can do to personalise the property to you and if these incur any extra costs – or reduce the costs.
8. Find out which warranty provider the developer uses and ask them to go through it with you, especially highlighting what isn’t covered such as small cracks in plaster, natural settlement or things like driveways and fencing.
9. Check with your mortgage broker you are OK to go ahead and reserve the property and make sure the offer can be extended if the property isn’t finished on time.
10. Once everything is in place financially and legally and you are happy, you should be able to exchange.
11. Many good developers are members of the New Homes Ombudsman Service and some will allow you to do a professional snagging inspection on the property prior to completing.
12. Once the property is ready to move in, any snags are fixed, or in the diary to fix, you can complete on the purchase.
However, it’s important to know that if you are the first person to move in, there maybe things that do go wrong because it’s impossible to fully ‘test’ a new build home beforehand.
Do another check of the snagging report – has anything adverse happened since the one you had done prior to completion?
Have a file with all the warranties in so you know what you can claim from, who to talk to etc and be clear on what you can’t claim for too.
