Many people like new build properties, as they are tailored to modern living, offering the latest energy-efficient features, customisable finishes, and warranties that provide peace of mind for years to come that are tailored to modern living. This article is written by Solicitor Cassandra Ngu to provide a general introduction to the process of buying a new build home and highlights common issues which are associated with such purchases to potential buyers.
The general process of buying a new build property
- Finding your new home
Upon finding your new home, you will pay a reservation fee which ‘locks’ the property for a set period (normally 28 days). If contracts are not exchanged within this set period, you may lose the reservation and the fee you have paid. If you can, you should try to negotiate a longer period so that you have sufficient time.
- Instruct a Solicitor
The developer will recommend a solicitor, but you do not have to use the one they have recommended
- Developer Sends Contracts
This pack contains all documents in relation to the development, such as title deeds, planning permission, building regulations approval and 10-year new build warranty documents
- Apply for a Mortgage
Depending on the estimated completed build date of the property, you may need to apply for a mortgage straight away. However, if the build complete date is more than 6 months, you may have to exchange contracts first since mortgage offers are only typically valid for 6 months
- Exchange of Contracts
The exchange of contracts must take place within the reservation period set out in your reservation agreement.. The completion date can be either a fixed date or a notice period.
At the point when contracts are exchanged, a deposit of 10% is due. Depending on the Contract, there may be stage payments.
- Build Completion
The developer will keep you updated about the build process. You may also be asked to do an inspection before the notice is served. Finally, our solicitor will also receive the notice to complete on behalf of you.
- Completion day
This is when the balance of purchase price is sent to the developer. Once the developer receives this, they will then receive the keys. The completion day will also include the handover with the developer’s agent. This will include the likes of: meter readings, user manuals for appliances and heating systems.
- Post-Completion
After you complete, it is important to ensure that service charge accounts (if any), utilities, council tax, and home insurance are all set up.
Other than that, enjoy your new home!
Common Issues in New Build Purchases
While new build properties may sound perfect on paper, it is important to consider whether they are the right choice for you when you are looking to buy a home. With that in mind, here are some of the most common issues when it comes to new build purchases.
Confusion Around Completion
Buyers are often unaware of the difference between fixed completion dates and “on notice” completion, which can cause uncertainty and planning issues. Without a long-stop date, the developer could delay completion indefinitely. We’ll ensure you understand when you’re expected to complete and can plan accordingly as part of our new build conveyancing service
Mortgage Offer Expiry
New build mortgage offers typically last 6 months. Remember to apply at an appropriate time, reducing the risk of offer expiry.
Deposit Not Properly Protected
If your deposit is held as the developer’s agent and they go bust, you could lose it. We’ll check how your deposit is held (stakeholder vs. agent) and ensure it’s protected by a warranty scheme, so your money is safe.
Inadequate or Unacceptable Warranty
Not all warranties are accepted by mortgage lenders. Check that a valid new home warranty is in place and whether it is acceptable to your lender
We Can Help You
Lisa’s Law is experienced in acting for new build buyers and will represent your best interest. If you need any assistance or have questions about your new build purchase, please do not hesitate to contact us. You can also view our residential conveyancing page for more information about our services.
Have questions? Get in touch today!
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