In recent years, new build properties have become increasingly popular among homebuyers, offering the appeal of modern amenities, energy efficiency, and the excitement of a brand-new living space. However, like any significant investment, there are both benefits and drawbacks to consider.

The process of purchasing a new build property can differ somewhat from buying an existing home, making the role of a conveyancing firm such as Franklins crucial for ensuring a smooth transaction, as hassle-free as possible.

In this blog, we will look at the advantages and disadvantages of buying a new build property to help you make a well-informed decision before committing.

Pros of Buying a New Build Property

Modern Design and Contemporary Amenities

New build properties are constructed using the latest architectural designs and feature modern amenities such as open-plan layouts, en-suite bathrooms, integrated appliances, and high-speed internet connectivity. These features cater to the preferences and needs of today’s lifestyle.

Energy Efficiency

A major benefit of new build properties is their energy efficiency. They typically incorporate the latest insulation, heating, and cooling technologies, leading to lower utility bills and a reduced environmental impact. Some lenders even offer a better interest rate or cashback on energy-efficient homes.

Customisation Options

Depending on the construction stage, some developers allow buyers to customise finishes and fixtures, giving you the chance to personalise your new home according to your tastes meaning there should be very little you will need to do when moving in.

Incentives

Majority of the developers will throw in some free sale extras to get the sale done which may include covering SDLT costs or Sale Extras costs.

Builder’s Warranty and Guarantees

New build properties come with a builder’s warranty, providing peace of mind against structural defects and major issues during the first 10 years of ownership. Additionally, modern appliances and systems often come with separate manufacturer warranties.

Lower Maintenance Costs

Since everything in a new build is brand new, maintenance costs are generally lower in the initial years compared to older properties, which may require immediate repairs or renovations.

Cons of Buying a New Build Property

Premium Price

New build properties often come with a higher price tag compared to older homes in the same area. It’s important to consider whether the additional cost is justified by the benefits of a new build.

Potential Completion Delays

Construction timelines can be delayed due to factors like weather, labour shortages, or financial issues faced by the developer which could take weeks or even months. These delays can disrupt your moving plans and cause inconvenience.

Limited Negotiation Flexibility

Unlike older homes, where negotiating the asking price is common, new build properties often have less room for price negotiation, especially in high-demand developments.

Potential Snagging Issues

New build properties may have minor issues, known as “snagging” problems, that need addressing after you move in. These might include cosmetic defects or incomplete finishes. As your conveyancer, we can help you identify and resolve these snagging issues, liaising with the developer to ensure necessary repairs or finishing touches are completed to your satisfaction before completion, otherwise it may take months for the issues to be resolved once completion has taken place.

Space

A significant number of developers will develop a high number of properties on one development to maximise the profit, meaning there is usually less space for gardens, parking spaces and smaller room sizes.

Estate Management Charges

Many developments are not adopted by the local council and are managed privately by management companies, meaning the owners will have to pay for the maintenance of the playground and shared spaces via service charge.

Unestablished Communities

When buying in a newly developed area, the neighborhood may still be evolving, leading to uncertainties about the area’s future growth, access to amenities, and the overall character of the community.

Variable Quality

Not all developers have the same reputation for quality construction. It’s essential to research a developer’s track record and reviews from previous buyers to ensure you’re investing in a reputable property. As your conveyancing solicitor, we will perform thorough due diligence, reviewing the developer’s credentials, planning permissions, and any potential legal or regulatory issues related to the property. This process helps ensure you are making a sound investment in a property from a reliable developer.

Reducing the Stress of Your Purchase

Buying a new build home can be both exciting and complex. Engaging a reliable conveyancing partner can provide invaluable support and guidance throughout the transaction. From conducting due diligence and reviewing contracts to handling payments, addressing snagging issues, and registering the property, conveyancing companies play a crucial role in making your new build purchase a successful and stress-free experience. With our expertise, you can confidently step into your modern, energy-efficient dream home.

You can contact our New Home conveyancing team here or call on 01604 936512 / 01908 953674 or email info@franklins-sols.co.uk.

1. Pick the right home for you

Developers and Development Sites vary widely as to how they work, what they offer and the development schemes available.

Before committing to buying a new build property you should research the developer, visit the site and possible speak to some of the residents who have already moved in to their new homes. If you are looking to relocate to a new area, investigate the surrounding area – transport links, schools, amenities and all other local facilities will vary between locations.

The sites sales office should have a range of literature available to you to help you in your decision making process.

2. Finance

If you need mortgage finance to be able to purchase the Property, make sure you consult a mortgage advisor before you get too involved with viewing properties, so as to be sure what your purchase price budget is.  A mortgage advisor will have an in-depth knowledge of the mortgage market as well as any government schemes intended to help homebuyers with a new build property purchase.  You may also want to have a mortgage agreement in principle, so that before you move to the next step you are confident that you can finance your new property purchase. You will need to finalise your mortgage and make a full application after you have successfully reserved your new home.

3. Reserve your new home

Once you have found a property that you want to purchase and have finances in place, you will be able to reserve your new property with the developer and pay the reservation fee.

The reservation fee will be anywhere between £500 and £2000 and will secure the property for you for 28 days. During the 28 day reservation period you will need to progress to being able to exchange contracts. The reservation fee is deducted from the final price when your purchase completes.

4. Appoint your Property Lawyer

The Developer may encourage you to use a Lawyer from their panel of preferred Lawyers – you are not obliged to do so and can choose your own if you wish to.

We would advise that when looking for legal representation that you look for a Law Firm who have a specialist new homes department, such as ours, as we are familiar with the deadlines involved and know how to deal with the extensive development documentation supplied.

5. Pay the deposit & exchange contracts

The deposit payable on exchange of contracts for any property purchase is 10% of the Purchase Price. The deposit will be requested by and paid to your lawyer once all legalities are satisfied (i.e. searches and mortgage offer received, enquiries replied to and all signed documents being in place). The deposit will be paid to the Developer on exchange of contracts, or may be held by the Developers Lawyers where the new home warranty does not cover insolvency of the Developer in order to protect the deposit paid.

6. Make a snagging list

Even with the best developer you should expect some minor snags, for example, doors may get caught on the carpet, tiles may be loose, paint finish needs a second coat, etc. Once the Property is fully built you should be invited to attend a walk around of the property to identify any snagging issues for the Developer to rectify.

If you’re thinking of purchasing a new build property and would like some advice and assistance, please do not hesitate to contact our New Homes team on 01604 828219 and ask for Kris Raca or email newhomes@franklins-sols.co.uk.

There are advantages and disadvantages when it comes to deciding between buying a new build or existing property. You will need to weigh up what factors are most important to you from your list of “must-have” features and which type of property ticks the most boxes for you.

To help you in making your decision, we have put together some pros and cons for you for both new build properties and existing “second-hand” properties.

New Build Properties – Pros

• Incentives – Some Developers will offer “extras” to secure a sale. Incentives are split between financial incentives and non-financial incentives. Financial Incentives could include stamp duty paid, a contribution towards legal fees or even estate agents fees paid if you have a related sale. Non-financial incentives could include carpets and flooring provided, or your kitchen white goods being provided at no extra cost, or even an upgrade to the standard kitchen or bathroom suite installed. The different incentive packages that a Developer is able to offer are often broad.
• Warranties – a new homes warranty will be available on most new build properties, which you don’t always get with a second hand property. New home warranties are designed to offer peace of mind that any defects will be put right and typically last 10 years.
• No chain – You won’t have a chain of buyers above you, which can often take away one of the biggest stresses of buying a home.
• Blank Canvas – a newly built property is a blank canvas with fresh paintwork, tiling, kitchen and bathroom. There should be little that you need to do before you can unpack and enjoy your new home.
• Design you own home – where you buy a property “off-plan” you will be able to pick the Plot that you wish to purchase based upon the design and specification of the property and may also be able to choose kitchen and bathroom layout and pick the fittings from a range of options.
• Low bills – all new builds have to comply with the latest building regulation standards, meaning that they are often more energy efficient than older properties.
• Modern living – Many new builds are built to a high specification which will include the latest technology.

New Build Properties – Cons

• Delays – not everything runs smoothly on a new build property and there can be delays outside of everyone’s control which can cause added stress, increase costs and also prove to be inconvenient where you are trying to plan your move around work, schooling and holidays.
• Snagging – there is often bad publicity in regards to poor quality new build homes. Even with the best developer you should expect some minor snags, for example, doors may get caught on the carpet, tiles may be loose, paint finish needs a second coat, etc. Once the Property is fully built you should be invited to attend a walk around of the property to identify any snagging issues for the Developer to rectify.
• Space – new build properties can often be less spacious than an older property due to the number of properties built on the site. This can often affect storage space within a property, so ensure that your furniture will fit and that you can get your car into the garage/on the driveway.

Second Hand Properties – Pros

• Character – there are plenty of older properties with features such as open fires, stained glass windows, exposed beams, sash windows which all add character to a property. These features often make us fall in love with a new property on an initial viewing.
• What you see is what you get – when you buy a new build property off plan it is often very hard to visualise what the property will look like and how it will feel to live in, but with an existing property you will be able to physically walk around and view the Property and see everything that you will be getting. A surveyor will also be able to attend to carry out a full inspection which will tell you everything you need to know about what you are buying.
• Community – an existing property may be in the heart of an established community, with pubs and restaurants close by and neighbours who have lived in the area for many years who will be able to give you historic background to the local area.
• Space – older properties are generally more spacious with bigger gardens.
• Potential for Alterations – whilst an existing home may not be “perfect” and may need some modernisation and alterations, you have some potential to put your own stamp on it and the ability to increase the value of the Property.

Second Hand Properties – Cons

• Chains – when you buy a second hand property it is likely that the current owner will also be looking to move to a new house, which will create a chain. Where you have a chain the wants and needs of all parties will need to be considered and the more parties involved the longer it can take for everyone to agree on timescales, which can make the move more stressful.
• Energy Efficiency – older properties are less likely to be as energy efficient as newly built properties. This could mean that your energy bills are higher with an older property.
• Maintenance costs – unlike a new build property you can expect an older property to need maintenance. Sometimes maintenance works will be required as soon as you move in.
• Renovations – you may want to carry out renovations and redecorate as soon as you move in, so you will need to budget for these extra costs.

The decision to buy a new build against an existing “second-hand” property will ultimately come down to personal preference. There is no right or wrong choice. Make sure you have all of the information you need before you exchange contracts and that you are buying the home that gives you what you need.

For advice in purchasing a new home, for new builds call our New Homes Teams on 01604 828219 and ask for Kris Raca or email newhomes@franklins-sols.co.uk or for second hand properties, contact our Conveyancing Teams on 01604 828282 / 01908 660966 or email conveyancing@franklins-sols.co.uk.

Buying a new build home is a very exciting time, but can also be very daunting too, particularly given the timescales involved and the mountain of paperwork that comes as part of the purchase process.  It is essential that you seek expert help and advice to make your purchase as smooth and stress-free as possible. To help you, here are a few key things to consider to ensure that you get expert help and advice:

Legal Matters

Most Developers will have Law Firms that they recommend, although you do not have to use the “preferred” Lawyer recommendation. We would advise that when looking for legal representation that you look for a Law Firm who have a specialist new homes department, such as ours, as we are familiar with the deadlines involved and know how to deal with the extensive development documentation supplied.

Financial Matters

Again, most Developers will have Mortgage Advisors/Financial Advisors that they recommend, although you do not have to use the “preferred” advisor, but it may be beneficial to do so, as they will know what additional information is required to support a new build mortgage application.

Stamp Duty

For information on Stamp Duty and the latest rates to help you budget for the costs of your purchase look at: www.gov.uk/stamp-duty-land-tax-rates. Even if your purchase does not attract a payment, it will still be necessary for a return to be lodged with HMRC on completion of the purchase – your Lawyer will attend to this on your behalf.

Arranging a Survey

Even through the Property you are purchasing may be newly built, you may also want to have your own survey carried out. Where you are purchasing with a mortgage, the mortgage lender will carry out their own valuation for lending purposes only – the lender valuation is not intended to be relied upon by any third party and is not a thorough survey of the Property. In addition, your own survey will look at the surrounding area in the vicinity of the Property, not just the Property itself. To find a surveyor in the area where your new property is, please go to www.ricsfirms.com and www.rics.org/usefulguides.

Buying a Leasehold Property

Your Lawyer will provide you with a full report and advice in regards to the Lease relating to your specific property and will be able to answer any questions you have. If you are seeking more general information before deciding whether to purchase a Leasehold Property, The Leasehold Advisory Service is government funded to provide free advice on the law affecting residential leasehold property – www.lease-advice.org

For help and advice in purchasing a new build property, call our New Homes Teams on 01604 828219 and ask for Kris Raca or email newhomes@franklins-sols.co.uk.

For further advice and assistance please contact our New Homes team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

A New Homes Warranty is designed to protect homeowners of newly built, converted or refurbished properties from structural defect in the first 10 years.

If the property has been built or converted within the past ten years, or is to be occupied for the first time, you must ensure that it was built or converted under a scheme acceptable to your mortgage lender.

What is a building warranty?

A building warranty is an insurance policy for newly built homes. The warranty is taken out by the builder or developer but is in place to protect the buyer.

Who provides new build home warranties?

The three main providers of new home warranties – the National House-Building Council (NHBC), Local Authority Building Control Warranty (LABC) and Premier Guarantee although there are many more. These operate under the Consumer Code for Home Builders.

There are also warranty providers operating under different codes of conduct

How long do warranties last?

Building warranties usually last for 10 years.

What do they cover?

On exchange contracts your warranty will cover your deposit against the Developer going insolvent. This means if the builder goes bust and doesn’t start or complete the property your warranty provider will reimburse your deposit. Not all warranty providers include this cover, so do check the position with your Lawyer for your particular Property.

Once the property is built, the warranty is split into two periods: –

Year 1 and 2 – defects insurance period.

Year 3 to 10 – the structural insurance period.

During the first two years if there are issues with the work the builder has done, such as the windows letting in rain because they’re not sealed properly or the heating not working because the pipes are faulty, the builder is obliged to come and fix them.

During the structural insurance period, the builder is only responsible for major problems with the structure of the house. This includes foundations, the external render, roofs, ceilings, chimneys and load-bearing parts of the floors. Smaller ‘defects’ become your own responsibility, including non-structural defects such as problems with your gutters or fixtures and fittings.

What is not covered?

Natural wear and tear isn’t covered by a new home warranty, neither is weather damage or any problems resulting from you not maintaining the property adequately.

Damp and condensation may be covered but only if they have occurred as a result of the builder’s failure to comply with the warranty provider’s standards (in other words, if it’s the builder’s fault!)

How do I notify a defect?

Contact the builder as soon as possible. Keep a record of all communication including dates and times of telephone calls. This will be needed if there are problems with getting your builder to address the issue.

Some warranty policies have an excess, which means you will pay an initial excess for each claim made under the warranty

What happens if the builder won’t honour the warranty?

If the Builder conforms to the Consumer Code for Homebuilders, the code features a dispute resolution scheme which you can use during the first two years if the builder won’t carry out the necessary remedial work.

Does the warranty remain valid if I move house?

The warranty is attached to the Property and is transferred to your buyer. Any work you have done on the property yourself (extension and alterations such as loft conversions or conservatories) will not be covered by the warranty.

Can warranties affect my mortgage application?

Yes. It is usually a condition of most mortgage applications that a warranty must be in place if you’re buying a newly built home.

Should I take out home insurance too?

Yes. Aside from the fact your mortgage lender will require you to have buildings insurance in place, it is sensible to protect your investment. The new home warranty only covers problems that are the builder’s fault. If your home floods because of bad weather or is damaged in a fire you won’t be covered.

For advice and assistance in purchasing a new home, please do not hesitate to contact our New Homes team on 01604 828205 for Marie Bevan / 01604 828219 for Kris Raca or email newhomes@franklins-sols.co.uk.

1. Know the difference between Searches, a Mortgage Valuation and a Homebuyers survey –

Early on in the conveyancing process, your conveyancer will ask you to make an initial payment on account to cover the cost of searches against the property you intend to purchase. These will cover environmental matters, water and drainage and a search of the local authority records for entries relevant to the property. As part of your mortgage application process your lender will also conduct a valuation of the property, a report on which you should receive with your mortgage offer. To produce this report the valuer will however have only attended the property very briefly, or may perhaps have only conducted a ‘drive-by’ valuation. It is therefore advisable to commission a full survey of the property separate from the above reports, for a detailed assessment of the property’s condition. Your estate agent should be able to assist with booking a survey for the property.

2. The process will take time –

Chances are that after having your offer accepted for a property, you will be keen to get the key for the house as soon as possible. It is therefore likely to be frustrating to learn the conveyancing process may take three months to complete – or longer in some cases.

3. Arrange Buildings Insurance –

It is vital to have buildings insurance in place by the point of exchange of contracts, so look early on at the policy that suits you best. This may be offered by your mortgage lender, or alternatively you may wish to look at comparison websites. Remember – you will need to be insuring the property from the date of exchange, not completion!

4. Don’t make yourself homeless –

Prior to purchasing your first home, you may well be living in rented accommodation. The temptation will be to hand your notice in early to your landlord, to avoid having to pay your first mortgage payment after completion as well as rent. Be aware however that the date for you to move into your new house can only be set when contracts exchange, and therefore handing in your notice to prior to this date can be very risky, Always make sure you have a contingency plan in case the date for completion of your house purchase slips beyond the date you need to vacate your rental property.

5. Organise your source of funds as soon as possible –

Prior to you being able to transfer your deposit and exchange contracts, you will need to supply your conveyancer with documentary evidence as to how you are funding the purchase of the property. This will include the need to disclose any third party contributions, such as gifted deposits. It is advisable to provide this information as early as possible during the process so as to not delay matters closer to the date of exchange.

6. Re-inspect prior to exchange of contracts –

The principle of ‘caveat emptor’, or buyer beware, applies to property transactions. The obligation is on the buyer to ascertain as much information about the property prior to exchange of contracts, and the buyer then takes the property in its current condition at the point of exchange. It is therefore vital that you are fully satisfied regarding the property’s condition prior to exchange. Chances are by the point of exchange your first viewing of the property will have been a number of weeks ago, and therefore it is advisable to re-view before exchange to identify any potential issues.

7. Know the difference between exchange and completion – and the significance of both –

Exchange of contracts creates a legal obligation between you and the seller for you to purchase the property on an agreed date. You will need to have signed your contract and lodged your deposit with your conveyancer before exchange of contracts can take place. In only rare circumstances will this also be the date that you receive the key for the house, which will be the date for completion. Completion typically follows around a week after exchange of contracts, however it can be longer depending on the intentions of the parties in the chain.

8. Stamp duty –

Do you need to pay? If you are purchasing the property for less than £300,000.00 and neither you nor anybody purchasing the property with you have owned a property previously, you will be eligible for a stamp duty exemption. Special rates also apply if you are purchasing a property exceeding a price of £300,00.00.

9. Protecting your deposit –

If you are purchasing the property jointly but are making unequal financial contributions towards the purchase price, you may wish to consider protection your contribution by way of a declaration of Trust. Our expert private client department can advise you on the appropriate steps to take to match your requirements.

10. Ask questions! –

The process can be confusing and at times overwhelming. Our conveyancing team will be on hand to answer any questions you may have.

For more information about our Conveyancing Solicitors visit our Conveyancing page.

If you would like any further advice in relation to purchasing your first home, contact our expert Residential Property team on 01908 660966 / 01604 828282.