[lead]A new build house is a property that’s newly constructed and has never been lived in before. Whether you’re a first-time buyer or looking for your next home, a new build property could be a great option for you.[/lead]
The process of buying a new build is similar to buying any other property. However, there are some differences and some key considerations you should be aware of before you commit to buying one. This article outlines the process of buying a new build property and answers some important questions you may have, to make the process of buying a new build as smooth as possible.
The new build conveyancing process
Step 1: Buyer reserves the property with the development company
This can be when the property is part built or when there are just plans for building the property. This stage usually involves paying a reservation fee to the developer’s site office. This can be anywhere between £200 – £2000+. Developers are usually keen to exchange contracts within 4 weeks of putting down a reservation fee (discussed at step 3).
Step 2: Buyer instructs conveyancing solicitor
Choose a conveyancing solicitor – one who is experienced on working in new builds. You can instruct someone in our conveyancing team by asking us for a quote be emailing law@oliverandco.co.uk or via our Contact Us page.
Your solicitor will perform all the necessary checks of documents including building approvals and planning permissions, along with building regulations compliances (on completion). A Local Search, Water & Drainage Search and Environmental Search will be carried out to reveal all relevant information relating to the property and surrounding area – including local planning proposals, flood risks, water supplies and sewage, amongst other things –although you are not legally required to complete these searches as a cash buyer however this is recommended to protect your interests. All lenders require these searches to be carried out as a condition of their mortgage (if you are purchasing with the aid of a mortgage). Searches can take up to 6-8 weeks to be completed.
Step 3: Exchange of contracts and payment of deposit
Once all searches are completed and documents have been reviewed by your legal advisor and are acceptable then a report on the property is provided to you. On the return of the signed documentation from you the deposit is requested from you. The deposit is usually 10% of the purchase price or 5% if purchasing a shared ownership property. Payment of the deposit and exchange of contracts secures your purchase and makes it a legally binding agreement.
A completion date will be set at this stage. This could be a set date or often with new builds, completion is on the basis of “exchange on notice”. If the property build is complete, a fixed date can be agreed. If the property build is not complete, then completion will take place within 10 days of the developer’s solicitor confirming to your legal advisor that the property build has been fully completed. The latter may be used where the developers are not entirely sure when the build will be complete.
Step 4: Completion
This is the day of completion whereby all final purchase monies will be sent to the developer’s solicitor, and you will be handed the keys to your new home and become the legal owner.
New build conveyancing FAQ’s
Is buying a new build more difficult?
Yes – there are a lot more issues that can arise throughout the conveyancing process such as planning regulations compliance, NHBC inspections, discrepancies in plans, road plans and drainage plans.
What makes purchasing a new build different?
The property may not have been constructed when you agree to purchase it. A fixed completion date is not often given; therefore, the process could be longer than when purchasing an older property. If you are purchasing with the aid of a mortgage, the expiry date of the mortgage offer needs to be taken into account.
What is the NHBC Warranty?
National House Building Council provides a protection for you as a buyer by providing a warranty/insurance over your new build property for 10 years. All builders are required to build in accordance with the cover provided by the NHBC or other warranty provider and to meet their standards.
When will completion happen?
This will all depend on how long the property takes to build. Developers usually require exchange as soon as possible which will give an idea of when completion is going to take place. A lot of things like weather and building standards can affect the longevity of completing on a new build property.
How long does a new build property take to be constructed?
On average, new builds can take anywhere between 6-12 months, or even longer. It is important to get a good grasp of this information from the developer or their site office of a rough estimated time frame that they are aiming for. Remember, a lot of factors can contribute to the delay of the process and therefore it is important to always keep that in mind.
Our New Business team can provide you with a quote and can advise you further. Please contact them on 01244 354658.
