New Build Home or New Build Headache?
26 April 2021
Buying a new build home is an attractive proposition for many, especially first-time buyers who can benefit from a number of financial assistance initiatives, such as Help to Buy equity loans.
For many, it may be the idea that they will be the first to live in the property, with all new fixtures; or it may be the fact that there will be no decoration and refurbishment needed, and no remedial or repair work is likely to be needed for a number of years.
However, despite the obvious benefits, there are a number of potential pitfalls that come along with buying a new build home; so, what should you keep in mind when considering buying a new build home?
Who are the developers?
Find out as much as you can about the developer. Are they reputable? Check online to see whether there are any news articles mentioning the developers; Check review sites and visit other sites they have developed locally to check the standard of their work. If you are new to the area visit and check the site itself and the surrounding area. Does the information in the sales brochure match what you see and experience during your visit? You could even speak to house owners to see what their experience was/is.
The developers sales team
They are paid to sell and progress the transaction as quickly as possible for the developer. You may also be recommended to use the developers preferred Solicitor on the premise that it will be quicker. Do not let yourself be pressurised into something you are not comfortable with. Instructing a good, independent Solicitor who will help and guide you through the process and ensure your interests are looked after first and foremost is key.
Don’t rely on the promotional brochure and show home
Obtain copies of the detailed plans and specifications to include the design, measurements, type and quality of the materials and decorative finishes. Visit the property as often as possible to check progress, especially before completion, and ensure that everything is to standard and as you expected.
Also check whether a management company will be responsible for any communal areas, and what their charges are/likely to be. Ensure they are acceptable to you before proceeding and that there are no unexpected charges. A good, independent Solicitor will be able to advise you fully on the management company charges and your responsibilities.
New Build Warranties
Check if the developer is a member of a new build warranty scheme such as NHBC. They are designed to give you peace of mind for the first 10 years after construction. However, they do not cover workmanship and finishing (see above) only structural issues. You will need to ensure that there is provision in the sale contract for the developer to remedy any workmanship and finishing issues.
If you are buying with the aid of a mortgage, check that the warranty scheme the developer is a member of is acceptable to the lender. Some lenders only accept certain warranty providers and may therefore not be willing to lend against the property.
Leasehold or Freehold
This is a key consideration! You may expect if you were buying a flat that it would be leasehold; however, new build houses can also be leasehold. Although less common now, due to campaigning by consumer groups, you may still come across leasehold new build houses. New build leasehold houses are usually sold with ground rents that may double every 10 years and have onerous fees, leaving it difficult to sell the property in future as any prospective buyer may be refused mortgage lending. You should ensure that any new build house is therefore freehold. You can find more information on this in our article ‘Unacceptable’ leasehold terms – good news for leaseholders!
For any further information on this matter, please contact our residential conveyancing team, you can find their services and contact details by clicking here.
This article was written for Redkite Solicitors by Trystan Davies, Trainee Solicitor.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.