Buying a New Build: What to Consider

Moving into a new build home can be hugely exciting. And there are some significant advantages to buying one of these houses.

You often have the choice of fixtures and fittings, making sure the house is perfect for your taste. You usually get a guarantee or warranty, and you’ll usually enjoy lower energy and running costs. You’ll also be the first person moving in, so you don’t have to worry about what anyone else has done to the property.

But there are also potential downsides to buying a new build.

Here are the most important things to consider.

No chain

One of the biggest benefits of buying a brand new home is that you’ll be chain-free. Being in a chain increases the risk of delays when the other members have problems with their move. When you avoid the chain, your purchase doesn’t hinge on anyone in front of you.

All you have to wait for is your developer to complete the build.

Development delays

If you’re buying off plan (before the development is finished), you risk delays with the building work. This can cause your completion date to be postponed. As an insurance policy, you can negotiate a long stop date, which is the date the work should be finished by.

If it isn’t complete by then, you can get your deposit returned and you can get out of the purchase contract or the developer will pay you compensation.

Higher costs

New build homes are usually more expensive than similar older homes. Known as the ‘new build premium’, this doesn’t mean you’ll get a higher amount if you choose to sell it. Like cars, new build properties lose a lot of value as soon as you buy one.

If you’re considering a new build, it’s advisable to make sure it’s the home you’ll stay in for a significant period.

Less space

New build homes aren’t built to the same specification as older ones. This means they’re often built smaller so developers can get more homes on a piece of land. Developers can stage homes carefully to give the impression of more space, so bear this in mind when looking around a show home.

A lack of sufficient storage is a common complaint from new build homeowners, making this something to look out for during viewings.

Mortgage complications

You may find it more difficult to get a mortgage when buying a new build. This is because certain lenders are stricter about loan to value ratios. And most mortgage offers expire after six months. This means if your home isn’t built and ready by then, you’ll have to apply for a new home loan.

Try to time your mortgage application for when you’re confident the home will be finished. And make sure your long stop date is no later than your mortgage expiry date.

Prices are negotiable

Even though the developer may state how much one of their homes is, this is no different to an existing home’s seller setting an asking price. It’s all up for negotiation. Don’t feel like you can’t make a lower offer on a new build home.

You’ll experience varying levels of success depending on how much demand there is, how far along the development is and the home’s location.

There may be snags

Some new builds have the odd problem when it’s finished, like doors that don’t hang quite right or carpeting that hasn’t been fitted properly. Defects in new build homes are called snags, and you can arrange for a snagging survey to be done.

It could be well worth doing so, in case you find out that there’s a major problem. It gives you the option to reconsider your purchase.

Many are leasehold

One of the most important things to find out early in your evaluation process is whether the home is leasehold or freehold. Leasehold properties can often cost more in the long term, since you have to pay additional costs, like maintenance fees and ground rent.

Ground rent can increase significantly so make sure you know what the extra costs will amount to.

When you’re buying a new build home, you’ll need an expert conveyancing team behind you. Get a free conveyancing quote to help you work out what the costs of buying a home might be.

First4Lawyers is here to make the legal side of a home move as straightforward as possible.