Buying A New Build Property – What Are The Differences?

In the current market, many house builders are offering significant incentives to buyers looking to move into a new property.

There are a number of advantages that come with purchasing a new build property. You will be the first person to live at the property and can also choose certain aspects of the internal design. These are often very appealing options to many first time buyers and growing families alike. 

However, there are a number of different factors to consider when purchasing a new build property as opposed to an older property. 

1 – Price 

• You will secure the property by paying the developer a reservation fee. This will typically range from £250 to £2000. Payment of the reservation fee will reserve the property until the exchange deadline set by the developer.

• Often developers will attract buyers by offering money-saving incentives, such as upgraded appliances at no extra cost, free car parking spaces and Stamp Duty Land Tax incentives. 

2- Completion Date

• Your solicitor will advise which of the below 2 categories your completion date will fall into prior to exchange of contracts:

1. Fixed Completion: a set date is provided for completion. This is the date you will get your keys.

2. On Notice Completion Date: the builder will give you an anticipated completion date but you won’t actually be able to complete, and move in, until the property is ‘build complete’ and has been signed off by buildings inspectors.  So in this case you may need to be flexible about the date that you will move in. 

• If the purchase is dependent on the sale of an existing property, it is important to make your buyer aware that you are buying a new build property. It may take longer to reach completion if the property is not yet ‘build complete’. 

• Mortgage offers tend to be valid for up to 6 months from the date of issue. It is important to ensure that you have a valid mortgage offer in place until completion. This may mean applying for a new mortgage offer or mortgage offer extension – make sure you discuss this with your broker. 

3 – New Home Warranty

• A New Home Warranty is taken out by the developer to protect the buyer against particular types of problems with the property, such as structural issues, for up to 10 years.  

• There are three main providers of new home warranties: The National House-Building Council (NHBC), Local Authority Building Control Warranty (LABC), and Premier Guarantee.  

4 – First Homes Scheme

• First time buyers can get discounts of between 30% and 50% when buying a new-build property, or property that was part of the Scheme when it was newly built.

• To benefit from the scheme, you must be over 18 and a first time buyer who is able to get a mortgage for at least ½ the price of the home.  Your total household income must be not more than £80,000 (or £90,000 if you live in London)

• The property must be in England and be valued at no more than £250,000 (or £420,000 in London) after the discount has been applied.

Poole Alcock have a dedicated new build team who have years of experience in all aspects of new build property transactions. We will work with you to ensure that your transaction proceeds as smoothly as possible. Please contact us on 0800 470 0331 for a no obligation quote.