New builds - steps to buying a brand new home
You may have noticed a number of new builds currently under construction in the Southend area. Last year, the Government introduced the starter home initiative, a scheme designed to help young first-time buyers step onto the property ladder. This involves the development of numerous new homes across the country, offering opportunities to quickly become a homeowner.
What are the benefits of a new build? Repairs and redecoration costs should be decidedly low for the first few years and the first owners may be able to select the final fixtures and fittings. Brand new properties often include guarantees, such as the packages offered by NHBC. Plus, there is a charm to being the first people to live in a brand new property.
Nevertheless, amid these positives are potential pitfalls. People often purchase these homes long before the project is completed, which means they need to be wary of dodgy developers. Depreciation will also kick in as soon as the door is unlocked. Therefore, as specialists in property law, we would like to offer some helpful steps on purchasing a brand new home.
When browsing for a new build, it is important to remember you will be charged a reservation fee to secure the plot of land it is built on. The fee is usually around £500 and generally will be returned to you once the project is completed. Before choosing to purchase, you will also need the funds available to cover a deposit of between 5% and 10%.
Buying ‘Off Plan’
As mentioned above, purchasing a new build can be a risk, as you normally will not see the actual house until much later. We would recommend doing research on the developers of the home in question, to check their standards of quality and previous projects. It’s also worth seeking legal advice on how to protect your investment should the work not meet your expectations when completed.
Exchange for the Purchase
Conventionally, you will be required to commit to the purchase within 14-28 days after you reserve your plot. This is known as the exchange of contracts. It is essential that your conveyancer and mortgage providers are aware of this deadline, so they’re able to work towards this. With their financial and legal support in place, it will help the process run much smoother.
Securing the Mortgage
Alongside leaving the deposit and committing to the exchange of contracts, you will need to secure your mortgage well in advance. We, as members of the Law Society’s Conveyancing Quality Scheme, are trusted to work alongside any mortgage provider, which eases the early stages of the move.
Furthermore, you will likely have to renew your mortgage offer closer to the actual completion, a date that can be 12-18 months after you exchange. This delay can prove an issue if your circumstances change between getting the first offer and trying to renew it later. We’d recommend seeking out financial advice to help you plan for any potential shifts.
Inspect the Property
Finally, when the property is completed, you should carry out a full inspection. This is to check for any snagging works that remain, as these should be fixed at the expense of the developer. Inspecting the home early allows you to identify any issues immediately, providing evidence should disputes arise concerning the quality of the finished build.
Considering a new build in the Southend area? Our exceptional conveyancing team are happy to advise you on a potential purchase and the legal requirements. We can also provide specialist support and representation should disputes over the property lead to the courtroom.
Arrange a free, 30-minute consultation at our offices in Leigh-on-Sea or Rochford on 01702 477106. You can also find us on Facebook, Google+, LinkedIn, Twitter and Instagram for regular updates.