Alex Eddy, buying a new build home

Buying a new build home

| Published on October 20, 2016

Five things to consider when buying a new build home

With the government pledging to build one million homes over the next five years, more of us look set to buy a brand new home in the future.

Alex Eddy residential property expert with Humphries Kirk in Wareham offers some advice for you if you are thinking about buying a new build property.

Make sure you know what you are buying

Your new build home may not be complete when you agree to buy it. If you are buying the house off plan, it will not yet exist at all. Instead, you will be relying upon the developer’s plans and specifications.

The developer may provide a show home to showcase what the completed properties should look like. However, this could be very different, in terms of plot location, size, and even finish, from the house you eventually move into.

It is important, therefore, to be as clear as possible about the specifications of the property you are buying. Check your property’s size and dimensions, the plot location, and pin down exactly what the developer is including.

Consider the development as a whole

On a new development, consider the facilities and overall mix of properties, which should be there when it is completed. Ask about the developer’s timetable for finishing the estate.

As with any property purchase, your lawyer can check compliance with planning and building regulations. Nonetheless, particular issues may arise with new developments. For example, planning conditions often prevent any property from being occupied until the estate roads are completed.

Your lawyer can also check that there are adequate provisions for drains, roads and shared facilities like street lighting, and that these will become publicly maintainable. Sometimes individual property owners have to contribute towards the cost of shared facilities through a service charge, which the developer should disclose from the outset and which should be covered in the legal documentation.

Check whether the property is freehold or leasehold

Last year, over 40 per cent of new build properties were leaseholds. Traditionally, most flats are leasehold as it is an effective way of dealing with responsibility for a shared structure. However, an increasing number of new build houses are also now leaseholds.

If your new build home is leasehold, you will usually have to pay ground rent as well as a service charge. You may also need the consent of your landlord, or a management company, before you can alter or sublet your property. These will incur additional costs and could affect your use of the property. Discuss the potential implications with your lawyer before committing yourself.

Protect against potential defects

Most reputable builders will offer an insurance policy, or warranty scheme, against major structural defects for a ten-year period. Your lawyer should check that the policy meets your lender’s requirements, and explain any limitations to you.

It is also common for new builds to have some minor defects on completion. For example, the plaster may have cracked in places as the structure settles. Generally, you will not be able to delay completing your purchase because of this. On the other hand, your lawyer may negotiate a provision for the developer to agree a snagging list of minor defects with you and to remedy them within a defined time frame.

Choose the right conveyancer

If you are buying a new build home from a developer, they may try to recommend their preferred legal team.

It is more important, though, to find an independent lawyer who will put your interests first. Ideally, choose someone experienced in conveyancing new build properties. They will be familiar with your lender’s requirements and other issues specific to new builds.

Do not delay discussing your purchase with your lawyer. They can ensure the developer is legally bound to complete your property in accordance with the agreed plans and specifications, so you avoid any nasty surprises.

They can also check that the plot plan agrees with the Land Registry’s records. Unfortunately, it is not uncommon for plot boundaries to alter as a building estate develops, without the necessary changes being recorded at the Land Registry. Resolving any discrepancies early on can keep your purchase on track and prevent disputes in the future.

If you are interested in a new build property, or buying or selling a house, contact Alex Eddy, associate solicitor, in our residential property team.

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