Today the Chancellor announced more welcomed changes to Stamp Duty payments to help more people move, promote residential investment, and boost first-time buyer ownership. The best news is these changes...
Why Should I Buy a New Build Property?
With some construction sites not having closed at all, many house builders will have made progress in developing their new build sites while the rest of the world has been lockdown.
Sarah Ely, Residential Conveyancer at WSP Solicitors looks at the excellent reasons to buy a new build property in the current climate.
The construction industry was advised that it could continue to work provided builders complied with the Government guidance on social distancing and working safely to avoid the spread of COVID-19.
Although many site sales staff will have been furloughed, you can still view lots of information online and some builders offer virtual tours of their show homes.
So, why buy a new build property?
- For many it is the knowledge that a new build property will require little or no maintenance in the first few years and this appeals to those who are not keen on DIY
- New build properties come with a construction warranty for up to 10 years
- Modern construction methods mean properties are well insulated and cheaper to run
- Often the design and layout lends itself to today’s desire for open plan family living
- There are some Government assisted schemes for those getting onto the housing ladder
What should I watch out for when buying a new build property?
- Many new houses have smaller gardens as the cost of development land means plots are smaller than they used to be
- There may be teething troubles and snagging items that need to be ironed out
- There can be issues with timing of construction – especially if you buy off-plan – i.e. without actually seeing what you are buying.
What is a show home?
Show Homes are how builders market their properties. These more than often look gorgeous, but be aware of some of the tricks used to impress you when visiting a show home:
- The interiors are designed to impress and many include things that are not a standard spec which could mean you end up spending more than you intended on extras.
- Smaller furniture makes rooms look bigger
- If there are no built in wardrobes, is there room to include stand-alone furniture as well as the bed?
- Can you imagine your furniture in the space available?
- Is the garden big enough?
How much money do I need?
Work out what you can comfortably afford and obtain a mortgage in principal. There are various schemes that can assist in your house purchase, but be aware that buying a new build may not give you an opportunity to improve the value and property prices can go down as well as up.
The Government Help to Buy Scheme is an Equity loan scheme available to both first time buyers and also those looking to move on. The Government will loan you up to 20% of the cost of a newly built property and you will only need to find a 5% cash deposit. There is no interest on the loan for the first 5 years. This scheme is only available until 2023. You can find more information about the scheme here.
What Legal Work is involved when buying a New Build Property?
Ensure that you have a good conveyancer that is familiar with new build work and can guide you through the process (that’s us!).
Development land titles can often be quite complicated. We, as your conveyancer have the knowledge to check through the extensive contract paperwork and advise you accordingly. The developer will often specify a very tight timescale (between 4-6 weeks), in which we will be required to deal with matters before exchanging contracts.
Once contracts have been exchanged, if you have bought “off-plan” you may then have to wait months before the house is finished. Be aware as your mortgage offer could expire before the house is finished.
What are Rentcharges?
Finally, on many new build developments you may need to contribute towards the repair and maintenance of communal areas such as green open spaces, private roads or drainage systems. The requirement to contribute is usually registered on the property as something called a rentcharge.
A rentcharge can be created over both freehold and leasehold property and is often in favour of a management company on a new build estate. They may take the form of a fixed (and often nominal) rentcharge and a variable rentcharge (which covers the costs incurred by the management company).
The owner of the rentcharge has the right to recover any sums due, to the extent that they could take possession of the property is the rentcharges are not paid.
We can advise you further on this and all areas of the conveyancing process, to help make your life, less complicated.
For more information on buying or selling your home please visit our Residential Property pages here. Fill in the form in the sidebar of this page to get in touch. Alternatively, you can call us on 01452 411601.
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