The Basics of Buying a New Build
Whether you’re a first-time buyer or already on the property ladder, if you’re considering buying a new build and want to know what the process is and how it differs from purchasing a previously owned property, our handy guide is here to help.
Buying A New Build
When looking to buy a new home, new build properties have become increasingly popular, particularly for first-time buyers. Find out the pros and cons of buying new builds, what extras can be included, and how getting a mortgage can be influenced by choosing a freshly built home.
What are the pros and cons of buying a new build?
There are many reasons why someone might choose to buy a new build property. Some of the advantages include:
New build homes tend to be more energy-efficient than older properties, resulting in lower utility bills.
New builds often come with a warranty, which means that if any issues arise within the first few years, the builder will be responsible for fixing them.
New builds come with modern fixtures and fittings, which means you won’t have the cost of updating the fittings of an older, previously owned home that may have fixtures best suited to the style of past decades.
Some new build homes can be customisable, allowing buyers to choose certain features such as kitchen units or flooring.
Stamp duty exemptions or discounts are often available for first-time buyers purchasing a new build - making them a popular selection amongst this group.
Chain-free – Much of house buying can involve unfortunate incidences where the seller may no longer be able to sell their home to you as the sale of the property they were intending to buy has fallen through. With a new build, you’ll be the first owner, meaning you won’t have a chain of buyers above you. This can take away one of the main stresses of buying a home.
However, there are also some disadvantages to buying a new build, such as:
New build properties can be more expensive than older properties as it’s freshly constructed, although this can vary depending on the location.
A new build home may fall in value in the initial early years as if you’re buying in an area full of new developments, potential buyers are likely to be looking at the new builds popping up in the surrounding area instead. If you’re buying a new build, consider planning to live in it for the longer term.
Some may feel there is a lack of character in new build homes, with some people preferring older, more traditional properties such as Victorian homes, which are common in the UK.
New build properties may take longer to complete due to changing construction timelines, which can cause delays in the buying process.
There may be additional costs associated with buying a new build property, such as fees for a snagging survey or new furniture.
What is the process of buying a new build?
The process of buying a new build is slightly different from buying an older property. Here’s an overview:
Find a property: Search for a new build property that meets your requirements, either through an estate agent, property portal or by visiting the development site.
Reserve the property: Once you have found a property, you can reserve it by paying a reservation fee. This fee will vary depending on the builder but is usually around £500.
Instruct a solicitor: You will need to instruct a solicitor to handle the legal process of buying the property.
Mortgage application: If you require a mortgage, you will need to apply and receive an offer in principle.
Exchange contracts: Once the property is ready, you will exchange contracts with the builder and pay a deposit, usually 10% of the property price.
Completion: On the agreed completion date, the balance of the purchase price will be paid, and you will receive the keys to your new home.
Snagging: After completion, you will have a period of time to identify and report any issues with the property, which the builder will be responsible for fixing.
Move-in: Once any issues have been resolved, you’re free to move into your new house and start making it feel like home.
What’s included in a new build property?
As they are freshly constructed, new build properties often come with many essential features included in the price, such as:
Modern fixtures and fittings such as a fitted kitchen, bathroom suites, and energy-efficient appliances such as a washing machine, fridge and cooker.
A warranty from the builder, which can cover any issues that arise within the first few years.
A guarantee for the building's structure, often for 10 years or more.
Access to communal areas such as gardens or parking spaces, if applicable.
A choice of finishes and upgrades, depending on the builder and the stage of construction.
Buying new homes can be expensive and, at times, stressful, so these added features can help save money as well as create peace of mind.
What do I need to know before buying a new build?
Before buying new houses, there are a few things you should consider:
Research the construction company to ensure they have a good reputation and track record.
Visit the show home or marketing suite to get a feel for the development and the quality of the property.
Check the specifications of the property to ensure it meets your requirements, including the number of rooms, parking spaces, and outdoor areas.
Research the area where the development is located to ensure it meets your needs, such as transport links, schools, and amenities.
Be aware of any additional costs associated with buying a new build property, such as furniture or snagging surveys.
Check the leasehold or freehold status of the property, as this can affect future costs and maintenance responsibilities.
How easy is it to get a mortgage for a new build?
Getting a mortgage for a new build property can be slightly more complex than getting a mortgage for an older property. This is due to mortgage lenders wanting to protect themselves from the inevitable devaluation of the property in the early years, so being stricter on the amount they are willing to lend. However, many lenders offer specific new build mortgages, which can make the process easier. When applying for a new build mortgage, you may need to provide additional information such as:
Details of the development and the builder
The stage of construction of the property
Details of any incentives or offers from the builder
Confirmation of the property's warranty or guarantee
It is important to shop around and compare mortgage rates and deals to ensure you get the best possible mortgage for your new build property.
Leasehold vs Freehold
When purchasing a new build property, it’s important to understand the difference between leasehold and freehold. A leasehold property means that you own the property for a fixed period, usually between 99 and 125 years, but you do not own the land it is built on. This means that you will be required to pay ground rent and maintenance fees to the freeholder, who owns the land.
A freehold property means that you own the property and the land it is built on. This gives you more control over the property and any associated costs, but it also means that you are responsible for maintaining the property and the land.
If you’re ready to find a new home, Purplebricks can help provide everything you need instantly. Get in touch with dedicated local experts and a team who are ready to support you at every step of the process.