When your solicitor asks for bank statements dating back months, please believe us when we say they are not just being difficult! Gemma Francis, a Conveyancer in WSP Solicitors’ Residential...
Common Questions and Top Tips when Buying a New Build Home
Buying a new home is always an exciting process. With New Build properties having their own unique features compared to 2nd hand residential properties.
What incentives are available when buying a new build house?
These incentives fall into 2 categories:
- Financial (i.e. legal fees/Stamp Duty)
- Non-financial (flooring, additional plug sockets etc).
Each mortgage lender will have their own criteria as to what is an acceptable percentage to purchase price level and type of incentives –and is something to be discussed with your broker when looking at proposed lenders.
Please always enquire of the site to see what “incentives” they can offer. If you don’t ask you won’t know!
Why do I need a quote for legal fees if my developer is paying?
A common question asked by purchasers is why have you issued us with a fee estimate when the Developer is paying for our legal fee?
Under the Solicitor Regulatory Authority, we are required to advise of our legal fees and Stamp Duty Land Tax (SDLT) payable. This is for transparency. If the developer has offered to pay these for you, please do not be alarmed when we advise you of our costs. The Developer does not pay us directly and you do not need to invoice them for this. They are treated as an allowance on the final balance due to them on completion. That way we do not need to wait to be paid, we have the funds already on our account…making the process stream lined and more efficient.
When is my new build completion date?
Again these fall into 2 categories:
- Fixed Completion: a set date is provided and the specific date you will get your keys
- On Notice completion dates: an anticipated build completion date is given for when they expect the property to be built by.
Unless your house is in the final stages of construction or a stock plot you will not receive a fixed completion date. This is a definitive date for which you move into your house.
It is common practice to exchange on notice. Within the contract, there will be a termination date. This is usually 6 months if it’s not weatherproof or 2 months if it is. This provides the developer with additional time to build the house to the relevant warranty providers’ standards. If the house is not ready by this point you can void the contract and have your deposit returned. This protects purchasers from a never-ending build!
What is a snagging list?
Once the property is ready you will be invited to carry out an inspection before completion and details any “snags” at the property you wish to be resolved. All minor works headed under snagging will not delay completion under the terms of the contract if the property has been signed off by relevant warranty provider.
Are there any hidden costs involved with buying a new build property?
All developers will charge an engrossment fee for preparing the documents they send to a solicitor. The charge is around £150-£200 plus VAT.
Furthermore, it is often the case where a development is subject to an estate charge for an apportionment from the date of completion to end of the calendar year or even a full years charge in advance on completion. Please ensure you budget for this, and details should be contained in your solicitor’s report.
Help to Buy 2021-2023 – How does “Help to Buy” currently work?
This is the current scheme for Help to Buy assistance. This has reverted to only being eligible for first time buyers. Furthermore, there are price caps for the eligible properties available to be purchased under this scheme. The site office can advise you on this.
Help to Buy provides a 2nd charge after your 1st charge lender for a loan of 5-20% to assist you in your purchase. This is interest free for 5 years – once this has lapsed you will need pay back the percentage loan on the RICS approved valuation or sale price (whichever is higher). Alternatively you can choose to pay interest on the loan like you do on your 1st charge lender
For information on how we can help you buy your new build property you can get in touch today here or by using the form on this page. Alternatively you can call us on 01453 847200.
Consumer code for Home Builders/ New Homes Quality Code.
Most mainstream developers will obtain their 10 year warranty from NHBC, Premier Guarantee, LABC or Checkmate. Under registration with the warranty provider Developers are required to comply with the Consumer Code for Home Builders. This was developed to make the home buying process fairer and more transparent for home buyers. Please see the following link for more information. https://consumercode.co.uk/
This will be replaced with the New Homes Quality Code. Registration for Developers opened in Jan 2022 and closing at the end of the year. The consultation for this has taken five years and attempts to fill in any gaps and expand on the existing consumer code providing protection for purchasers. A key feature of the new code is specific new homes ombudsmen service. Please see the following website for more information. https://www.nhqb.org.uk/