What you need to check before buying a new build property

Numerous unique issues can affect new build properties, from inadequate warranties to snagging delays. Here's what you need to know.

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The benefits of buying a new home

Being the first owner of a new home is an exciting prospect. The property will be a blank canvas, often configured to the buyer's preferred specification.

The property will be compliant with the latest building regulations. Insulation properties, pipes, plumbing and electrical systems should all be up to the latest safety and efficiency standards. This should ultimately mean lower running costs.

If the property has any defects, they should be covered by a third-party insurance backed warranty that will typically run for 10 years after you move in.

You may have to wait for the construction to finish, but there will be no chain to create endless unforeseen delays in the conveyancing process.

In addition, schemes such as Help to Buy can only be used with a new build property.

What to be aware of when buying a new home:

The price isn't set in stone

Many buyers don't realise that the asking price for new build property is usually negotiable.

Negotiating the selling price with a homeowner is standard practice - so why not on a new build? Buying 'off-plan' doesn't mean that you cannot negotiate. Negotiating could get you a great deal, so don't be afraid to make a lower offer.

What's included in the sale?

Developers want to shift stock as quickly as possible. As soon as a site is sold up, the developer can move onto the next project. Developers may offer sales incentives, such as:

  • Paying your Stamp Duty
  • Flooring upgrades
  • Paying your legal fees
  • Upgraded kitchens and appliances

Always ask what is included in the sale. You can negotiate around the property's specification or other incentives.

The show home may differ considerably from yours

Show homes are there to sell the development. The developer will have employed professional interior designers and the unit will be full of pitch-perfect props.

The show home may differ in size and layout from the one you end up buying.

Be aware of the following tactics used to make a property feel more spacious:

  • Strategic layouts
  • Lots of mirrors creating the illusion of space and light
  • Space enhancing colour schemes and light reflective paints
  • Higher ceilings than your home will have
  • Bigger windows allowing more light to enter
  • Undersized furniture and appliances- making the room seem proportionately bigger
  • Uncomfortably hot rooms - designed to make you spend less time scrutinising a room
  • Living rooms without TVs - making the room feel cosier. TVs also have a familiar aspect ratio which looks odd in photos when the developer uses a special camera lens to make the room seem bigger.

Ask for a set of plans for the property you are interested in. Look closely at the detail.

Ask to see a layout of the overall scheme and visit the plot where your home will be built. If the scheme is semi-progressed, ask to see a property other than the show home.

Don't forget the garden

Developer sales tricks can also be found in the garden. The show home's garden will be landscaped - but will yours?

There may not be fences around the show home garden - creating a sense of infinity. Your garden will be fenced off. Check the plot size on the plans. Which direction does your garden face in? Will it be overshadowed by neighbouring properties?

Is there a warranty?

Most, but not all, new homes are sold with a warranty that lasts 10-15 years.

Ask the developer if they include a warranty. You don't want to an expensive repair bill if a problem occurs after you move in.

The property may be faultless, but the absence of a warranty means that when you decide to sell, your home will be worth less than it would otherwise be worth with a warranty.

Think about your finances

Getting a Decision in Principle (DIP) from your lender is a sensible idea. It doesn't cost anything and it confirms that the lender is willing to lend to you in principle. However, DIPs and mortgage offers are usually time-limited to 90 days.

If your circumstances change significantly, your mortgage offer could be withdrawn. It is advisable not to make any significant life changes to your life during this period, such as:

  • Getting into further debt
  • Changing your job
  • Spending some of your deposit

When buying off-plan, the period between exchange and completion can be months or even years. You should make sure you are confident that you will still be able to obtain a mortgage at the point of completion.

If property values drop in the period drop between exchange and completion, you will still have to complete the purchase at the original agreed price and the lender might not be prepared to lend you as much.

Make sure you have a contingency cash buffer if you can.

When will you be able to move in?

Builders are notorious for missing deadlines. Delays can occur on even the most prestigious developments.

If the developer tells you the property will be ready in 8 weeks, ask how realistic that timescale is and whether anything could hold up completion.

Shorter timescales (e.g. a few weeks) will usually be more accurate, but last-minute delays could hold up your move. Make a contingency plan in case the completion date is delayed.

Ask how many more homes will be built after yours

Living in a new home on an unfinished building site means ongoing noise and disruption.

Ask how long the site will be active after you move in. If the answer is a problem, look for a plot that is away from the ongoing work.

Snagging lists

After you move in, the builder may have a 'snagging list' of outstanding jobs. Developers have a habit of not always completing these snags as they are often eager to move onto the next project. Make sure you keep the pressure on and insist that this list of jobs is completed.

See also:

What you need to know when buying off-plan

Your next step

If you are buying, selling, remortgaging or transferring equity in a home, we can help you find an expert conveyancing solicitor.

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Gaynor Haliday, Legal researcher

Author:
Gaynor Haliday, Legal researcher