Buying a New Build

Buying a new build has a few key differences from buying an existing property. New build homes are appealing to buyers wanting a fresh start with modern features & warranties and an immaculate neighbourhood; however, they do come with some additional considerations which you should weigh up carefully before you choose to buy a new build home.

Pros & Cons of buying a new build

If you are buying a new build flat or maisonette, read up about the additional considerations involved in buying a leasehold property .

Check all property specifications carefully before buying a new build

You want to know about the quality of construction and materials, the colours, floor plans, size and dimensions of your home (especially if it will be smaller than their show home). Double check that the advertised size of the plan is the same as the actual size of what is built. When buying a new build, purchasers often find their internal space is smaller than was advertised to them.

You'll also want to get as much information as you can on non-physical specifications, for example:

• Property price
• Energy Performance Certificate (EPC) rating and Council tax band
• Mobility adaption
• Management charges
• Warranty terms
• Completion date (if unfinished)
• Restrictive covenants resale conditions

Questions for the developer

• What fixtures and fittings are included?
• What are the optional extras?
• What future development will happen on sites nearby (if applicable)?
• Are there any discounts and incentives available?

If you are buying a new build flat or maisonette

The property will be leasehold, so you'll also need to find out about the terms of the lease. As a new build, the block should have been built to up-to-date building regs and fire safety standards, which means you won't need to worry about an EWS1 form. RICS say, regarding new builds:

"The building owner should be able to supply all relevant certification re building regulations compliance etc, which should satisfy any lender requirements".

Use a mortgage broker for new build mortgage deals

New builds are considered higher risk by the lender because as soon as you buy the property, it loses its new build premium, much like buying a brand new car.

How much deposit do you need for a new build?

This means that lenders often want a higher minimum deposit, which can range from 15-25%.

Using an independent mortgage broker will help you find the best deals and get you access to exclusive arrangements, including the Deposit Unlock scheme, with participating developers and lenders. This scheme allows you to buy with a 5% deposit because the developer pays to insure the mortgage.

Research the new build developer

Not all developers are created equal. Start with the basics; look up their online reviews and check they are signed up to a quality code such as the Consumer Code for Home Builders or the The New Homes Quality Code. You may be able to find out if they have a history of completing on time or if they're risky regarding delays and mortgage expiry issues.

Speak to residents in the completed properties on the development (if it is partially finished) or other sites by the same developer. Find out if they are happy, how they found the process of buying their new build and whether they have come across any issues, particularly in the contract. You can pick up some tips to help you negotiate for a better price. If you can, visit a site that was finished 5-10 years ago - how do their developments stand up to the test of time?

Explore the local neighbourhood if you're not yet familiar with it; how easy is it to get from your plot to the nearest local transport links or to walk the journey to work or to the gym?

Be prepared to negotiate, with support from your solicitor

Shop around for good deals. Different developers offer different incentives; they may participate in the Deposit Unlock Scheme, offer to pay for your carpets, or even pay your Stamp Duty. Beware, though, that any incentive over 5% of the property value may affect your mortgage.

Instruct your conveyancer before you reserve the property. Your reservation fee is payable on acceptance of your offer, and you'll want your conveyancer ready to go when you put your offer in. The timeline to completion is often much shorter when buying a new build, so you don't have time to waste. With SAM Conveyancing, your conveyancing deposit is protected by our no sale, no fee guarantee, so if this purchase falls through, we'll move right onto your next property.

Having your conveyancer onboard before you reserve the property puts you in a better position to negotiate, as a new build conveyancing solicitor is trained to spot things in the pre-contract information and advise you on what is reasonable and what you can push back on - for example, the long stop date (after this date, you are legally allowed to walk away from the purchase and get a full refund, including reservation fee and deposit).

If you don't instruct your conveyancer until the reservation is paid, you're less likely to pull out as you'd lose this money, which puts you at a disadvantage when it comes to haggling with the developer.

Choose a conveyancer who is well experienced with new build purchases and who will be prepared to help you negotiate in case you decide to bring in the big guns in your haggling.

Don't use the developer's conveyancer when buying a new build

Developers often recommend a preferred solicitor; however, this poses a conflict of interest. If the solicitor gets client referrals from the developer, then they are incentivised to keep the developer happy. What you want is a solicitor who has your sole interest at heart and won't be conflicted when negotiating against the developer to get you a better deal.

Plan to stay put

Due to the premium on brand new homes, the property will lose value once it has a new owner (you). This means that if you bought the property today and put it on the market next week, you would lose money, not to mention all the extra costs like legal fees and stamp duty, which would have been wasted. You may still lose money if you sell after a couple of years amid a rising property market.

Now, this doesn't have to be your forever home, but you should plan to be here for the foreseeable. The best way to do this is to be realistic about how your needs might change in the next few years. Will you be likely to need another room? Would you be forced to sell if the mortgage rate went up by 2%? Are you likely to relocate for work? If the answer to any of these questions is yes, a new build home may not be a good financial decision.

After buying a new build

Get a snagging survey before you complete

You can get a Snagging Survey as soon as you receive notice to complete, which allows you to get any issues corrected before you complete the purchase or move in. Alternatively, you can have a survey up to two years after completion. This is a professional survey carried out by a qualified surveyor to ensure the property is built to the correct standards.

Don't decorate yet

New build properties take six to twelve months to dry out, during which time shrinkage cracks can appear. Hold off on redecorating until then to save having to touch up cracks later. It can also help to live in a space for a while before you make decisions about decor.

Make sure the property is registered at Royal Mail

Your home needs to be registered at Royal Mail so you can receive post, order deliveries and take out home insurance. Check with your developer before you move in, or contact Royal Mail directly if your house doesn't show up online.

Your solicitor should handle the Land Registry First Registration.

Check you're not overpaying on your Council Tax

Council tax bands are often predicted before the property is built, so it's worth double checking that you're on the correct one, although this is more common for older properties. You may also be able to get a reduction on your bill if you are a student, on a low income, have a disability or impairment, live alone, or only live with children under 18 years of age.

Deal with any issues swiftly

With a bit of luck, you won't have any issues with your developer. If there are, deal with the developer directly first. If your developer takes more than 12 months to resolve the issue, you can contact the warranty provider to resolve the problem. If you need to escalate a complaint about the service you've received or your warranty provider won't help you, you can submit your complaint to the Independent Dispute Resolution Scheme for free.

Check out our guide to What happens on completion day?