If you are considering buying a new home, you have probably noticed the large developments of ‘new build’ properties popping up on the edge of towns and cities in recent years.
You may have also heard the term ‘new build’ used within your social circles and friendship groups – but what classifies as a ‘new build’? and why are they such a popular option?
New build properties are often a great choice for first-time buyers or those wanting a quick, chain-free move. Although, you may need to wait for your property to be built – this is known as an ‘off-plan property’, once it’s ready, everything should be new and in perfect condition.
New build homes also adhere to certain guidelines set by the government, such as high energy efficiency ratings and warranties on built-in goods in case anything goes wrong – giving you cheaper bills and more protections.
What is a new build?
Mortgage lender Nationwide defines a new build property as a property that has been built, converted or refurbished within the last two years, which has never been sold.
Nationwide said this includes buying properties off-plan and occupied or rented properties which are still in the ownership of the builder/developer or self-builder.
Pros and cons of buying a new build
1) Ready to go – A newly built home is a blank canvas with newly installed amenities which makes it perfect if you simply want to unpack and go. There should be very little that needs to be done when you move in, unlike older properties.
2) Property Schemes – Developers and mortgage lenders often offer money-saving schemes for first-time buyers looking to buy a new build. For example, schemes such as Deposit Unlock and Own New Rate Reducer are only available if you buy a new home.
3) Incentives – Some developers throw in extras to get a sale. This could mean paying your stamp duty, money towards your deposit or covering the cost of carpets.
4) Modern living – New builds often have all of the latest technology, with ‘smart home’ features, or the option to pay an extra fee for high-grade appliances.
5) Design your home – If you buy your new build off-plan, you may have the option to choose the design of your home. For example, the builder may let you choose fittings and perhaps even the layout.
6) Low bills – New built homes have to comply with the latest building regulations. This means they’re often far more energy efficient than older properties.
Data from Energy Performance Certificates (EPCs) shows over 80% of new homes have the highest A or B ratings. That compares to just 2.2% of existing properties. With better EPC ratings, it opens up the option of green mortgages which can offer cheaper rates.
7) Chain-free – Being the first owner of the property, you won’t have a chain of buyers above you. This means that the move should be hassle-free and you won’t need to worry about the sale falling through.
8) Warranties – All new builds come with a warranty to cover certain aspects and appliances, which you don’t get with an existing home.
Cons of buying a new build home
1) Space – New-build homes can be less spacious than an older properties as developers may pack a lot of properties into a site to maximise profits. This can affect storage space, room sizes and the layout of the development.
2) New home premium – New build homes can fall in value very quickly, and with hundreds of almost identical properties on the same development, it can give potential buyers a lot of options when it comes to selling. It is advised that if you are buying a new building, plan to live in it for the longer term.
3) Estate management charges – Many new build estates are not adopted by the local council and are being managed privately by management companies. This means that the new build owner has to pay for the maintenance of the playground and shared spaces.
These costs can escalate, and owners find that they have no right to challenge the charge or change the management company. This is a growing issue for homeowners on new build estates.
4) Complicated legal work – New build conveyancing can be more complex than buying an older property. Issues can also occur when developers insist they used their recommended conveyancer in order to purchase a new build.
But this should be avoided at all costs. A good solicitor with experience of new build conveyancing but not partnered with the developer will ensure that the contract is in your favour, that your deposit is fully protected and that there is a ‘long-stop’ completion date for the property to be finished by.
The developer’s solicitor and sales team will exert pressure on you to complete, while a conveyancing solicitor chosen independently is less likely to bend under pressure.
5) Quality and Snags – If you are moving into a new build home, you should expect snags such as doors getting stuck on new carpets or a loose tile. Whether it’s a significant structural issue or a series of small annoying snags, by opting for a snagging survey, professionals will know what to look for to ensure your property is in the best condition possible.
6) Delays – New build developments don’t always run to plan and it isn’t unusual for the move-in date on a new build property to be delayed. This may be annoying as you are excited to move into your new home, but it can also cause added stress and costs if you need to pay out for rent in the meantime, storage or lose mortgage offers.
7) You should ensure that your solicitor implements a ‘long stop’ competition date to ensure you are protected if your house is not ready on time.
Further reading
Purchases – Oakwood Property Solicitors
WHAT TO DO NEXT
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