New build residential properties have a lot to offer prospective buyers. They can yield many benefits while adding an extra level of excitement to the conveyancing process. However, there are certain aspects of new build homes to be aware of if a sale is to go through friction-free.
Sometimes people are put off from buying new build homes because they have preconceptions about what is involved. This guide provides all the information on new build purchases, both for first-time buyers and existing homeowners.
What is a New Build Property?
A new build home is one that is either undergoing construction or that has been recently constructed. In both cases, the property won’t have been lived in prior to purchase. Properties that are sold before they’re built are called ‘off-plan’ homes. These also fall into the new build category.
A ‘new build’ can also refer to a pre-existing property that has undergone substantial renovations. For mortgage purposes, new build renovations will have been done within the last two years, during which time the property was not sold.
The Process of Buying a New Build Home
Buying a new build home follows a similar process to any residential property purchase. That is:
- Set a budget
- Secure a mortgage
- Browse and select a property
- Put in an offer an get it accepted
- Draft contracts and other documentation
- Hire a solicitor
- Conduct property surveys
- Finalise negotiations
- Exchange contracts
- Complete the sale and obtain possession of the property
However, the process of buying a new build property does come with some extra considerations. This simply adds steps to the buying process above and doesn’t drastically change it.
Thorough research
When finding the right new build home, there’s are arguably greater choice due to the potential of off plan builds. In this case, buyers can view show homes to get a sense of their ideal layout. New build homes can also be more easily adapted to fit the buyer’s vision than regular homes. Don’t just go for any new build, get expert legal advice to buy the one that’s right for you.
While all new build homes are freehold properties, the lease still needs to be examined. This is because nowadays some new build freehold homes have restrictive covenants. It’s an exception not seen outside of new build homes, which can lead to buyers being caught out.
Paying the reservation fee
Once a price has been agreed, new build buyers will be required to pay a reservation fee, which is typically around £1,000. This secures the property, preventing viewings and removing it from the market.
Pre-move snagging
Similar to a property survey, snagging surveys are carried out on new-build homes to find any issues or defects. It then falls to the developer to rectify these problems before the move-in date.
The Pros and Cons of New Build Homes
According to the National House Building Council, 2022 generated the highest number of new home registrations since 2007 (191,801). As a result, buyers are likely to comes across properties that are classed as new build. However, new build homes come with positives and negatives that make them unique compared to other properties. Buyers should therefore consider their position and weigh up whether purchasing a new build home is the right decision for them.
Pros
- No onward chain – being the first owner of the home means there isn’t anyone relying on your sale. As such, buying a chain-free property is often a less stressful process.
- Energy efficiency – new build homes have to comply with modern building regulations. This means property infrastructure like heating, insulation and * is up to date. As a result, new build homes are often able to save on their utility bills compared to older properties.
- New build warranty – every new build home comes with a warranty that protects against structural damage. This affects owners, contractors, builders and developers. The warranty typically lasts for 10 years, with the first two years including defect cover.
- No barriers to living – as the property has brand new features chosen by the buyer, it comes ready to be lived in. Subsequently, there likely isn’t anything that needs to be done to a new build home after the owner moves in.
Cons
- Costly delays – construction adds another dimension to the process of moving into a new build home that can be just as stressful as in a property chain. Delays can incur large costs when buyers have to seek temporary accommodation and put items in storage. Waiting can also affect mortgage offers.
- Space – when developers want to get the most use out of their site, they’ll aim to fit as many properties on it as possible. This reduces the amount of space available to each home, which can result in smaller sized rooms or less storage room.
- Short term benefits – most of the extra value found in new build homes comes from the fact it’s brand new. Once it’s been bought and lived in, this premium no longer exists. Buyers will therefore lose out unless they plan to live in the property long-term.
- Conveyancing complications – many developers will recommend the buyer use their conveyancer for a new build purchase. However, this splits the conveyancer’s priorities where they should be getting the most favourable contract for you. An easy way around this is to use professional residential conveyancers like Toomey Legal. We have years of experience in new build conveyancing Newcastle.
What to look for when buying a new build property.
New Build Property Conveyancing Services
Choosing to buy a new build property over an existing one isn’t a straightforward choice. With an expert in legal property services at your side though, your new build purchase will be far simpler. Toomey Legal have spades of experience helping those in the north east get their ideal home.
Our team of solicitors are on hand to provide expert legal advice for new build conveyancing Tyneside. Get started by contacting us today.