Helpful advice for those thinking of buying a new build home

Buying a brand new home off plan is a path well trodden but it differs from purchasing a second hand property. Here we take a look at the process, its positives and the potential pitfalls.

One of the greatest benefits in buying a new-build is energy efficiency. Most new homes are now rated A or B for energy efficiency, which is good. The other advantage is low maintenance as everything is new, plus most newly-built homes come with a ten year warranty that usually applies to structural and weather-proofing issues.

While developers who build at volume on larger sites have a show home, on smaller sites, this may not be the case. At Maple Wood, Church Fenton, near Tadcaster, there is no dedicated show house as all nine properties there are being built simultaneously and are due to be completed by December this year. Prices range from £585,000 to £950,000.

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However, Anne Haggas, head of Yorkshire residential development sales at Savills, which is marketing the properties, says: “It’s important that would-be buyers understand what is on offer so instead of a show house, we have created a finishing suite at the developer’s office. This allows buyers to see the specification of the materials and the fixtures and fittings in the properties, which is important.”

A computer generated image of the new houses being built in Church FentonA computer generated image of the new houses being built in Church Fenton
A computer generated image of the new houses being built in Church Fenton

She adds that with a small, bespoke developer there is generally less risk: “In the case of the Church Fenton development, we only started marketing the houses off plan six months before completion so would-be buyers could see that construction was well underway.

“The other reason for that is so that buyers can get a relevant mortgage offer because there is sometimes a difference between what people think they can afford and what a lender thinks they can afford.”

Completion dates can be a moveable feast, so, after you have placed your deposit/reservation fee, check regularly to ensure the construction team is on track. This will enable you to decide when to sell if you have an existing home.

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The other option is to sell immediately after you have reserved a yet to be built property and rent or move in with family until you get the key to your new home.

“Some people prefer to sell their existing home and put the money in the bank ready for completion on their newly-built property and that can be less stressful, not least because you know you aren’t going to get caught in a chain,” says Anne Haggas, who adds that most developers will be patient if your existing house has not sold but is being actively marketed at a sensible price.

Some of the larger house builders also offer part-exchange schemes, where they will buy your old property at a set price. This may be lower than expected compared with a sale on the open market though you will save on estate agency fees and it also means that you can stay in your home until you get the key to the door of your new house.

While new-builds are now sold as freehold, new apartments are generally sold as leasehold so you will have to pay service and maintenance charges, though ground rent charges have been banned.

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Check the length of the lease. It should be 100 plus at minimum and preferably 999 years. Reform is on its way to make it easier and cheaper for leaseholders to extend their lease but it could be at least a couple of years away.

Do your due diligence on the developer. A good selling agent should already have done this before accepting them as a client as if anything goes wrong, it will reflect badly on the estate agency.

Anne Haggas says: “Our compliance checks are rigorous and we can’t take an instruction from a developer unless we have the Land Registry documentation and other paperwork and if a reservation fee, which is usually between £500 and £2,000, is taken from a buyer that is or should be held in Escrow by a solicitor. It is taken off the price of the property when you buy it and is generally refundable unless you pull out after exchange of contracts.”

It’s easy to be swayed by a gorgeous showhome but don’t forget to check out the surrounding area and its transport links, schools and amenities. Also check if there are estate management charges as many housing estates are not being adopted by the local authority and are managed privately by estate management companies. This means you and other residents will have to pay for maintenance of shared spaces.

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When you do get your new home, it can be worth paying for a snagging survey. This will involve getting a surveyor or snagging specialist to check the property so any issues can be sorted before you move in.

Always use your own conveyancer rather than one working for a developer and check which council tax band the property will be in.