There is always something exciting about buying a house. There is especially something exciting about buying a new house. Perhaps the closest feeling is buying a new car. Much like a new car however, you can end up paying a premium for it being ‘shiny and new’. It is important to understand a few key points of buying a new build.
1. Developer timescales and pressure
When buying ‘off plan’, i.e. before the property has been constructed, completion will often be ‘on notice’. This means that, after contracts have been exchanged, completion will take place once the developer’s solicitors ‘serve notice’ on your solicitor.
You will usually be given a set number of days’ notice (often around 14 days) to complete. Once the notice has been served, completion is legally fixed for that date.
This can be particularly important if you are selling a property at the same time. If you are in a chain, your buyers will also need to be able to work to an ‘on notice’ completion. It is therefore worth understanding the proposed timescales from the outset and making sure everyone in the chain is aware of them.
Developers may also encourage or pressure you to use their preferred solicitors or mortgage brokers. There is no obligation for you to do so, and you are free to choose your own professional advisers. It is important to use professionals who are acting for you and who will explain the transaction and advise you on the terms of the purchase.
A local solicitor may also have experience of the development and be familiar with the developer’s requirements and the issues that commonly arise.
2. Service charge.
You might assume that buying a freehold house means you will not have to pay any ongoing charges. That is not necessarily the case. Many new-build estates have service charges to cover the maintenance of communal landscaping, open spaces, private roads and other shared areas. It is important to understand what the charge covers, how much you will have to pay and whether the amount is likely to increase in the future.
3. Developer covenants
New-build properties often come with a number of covenants or restrictions imposed by the developer. These can continue to affect you long after you have moved in.
This can be quite different from buying an older property. Older properties will often have historic covenants dating back many decades which, although still appearing on the title, may have little practical relevance and may no longer be actively enforced.
With a new-build, however, the covenants are likely to have been put in place by the developer for a particular purpose and may be actively enforced. They can cover matters such as extending or altering the property, parking certain vehicles, keeping caravans or commercial vehicles, letting the property, or making changes to gardens, fencing or other external areas. They can even include the colour you can paint your front door or the type of aerial permitted on your roof.
It is therefore important to understand the restrictions before you exchange contracts, particularly if you already have plans to alter or extend the property. You don’t want to discover after moving in that something you had planned is not permitted.
4. NHBC or equivalent
If you are buying a new-build property, you will usually have the benefit of an NHBC warranty or a similar new-build warranty. This provides important protection against certain defects with the property, particularly structural defects. We will check the warranty arrangements as part of the conveyancing process and make sure that the relevant documentation is in place before you commit to the purchase.
It is also worth arranging an independent snagging survey before completion. A professional snagging inspection can check the property against relevant standards, including the NHBC Standards, and identify defects or poor workmanship that you should ask the developer to put right. This can include everything from problems with brickwork, joinery and plumbing to issues with finishes and fittings. The New Homes Quality Code also gives buyers the right to have a pre-completion inspection carried out by themselves or a suitably qualified inspector.
The NHBC warranty is not a substitute for a snagging inspection. A snagging survey is about identifying problems with the finished property, whereas the warranty provides protection against specified defects in accordance with its terms.
Buying a new-build property should be an exciting experience, not a stressful one. Our conveyancing solicitors can guide you through the process, explain the legal and practical issues to look out for, and help make sure you understand exactly what you are buying. If you are considering buying a new build, get in touch with our team to find out how we can help.
Already bought a new build? A few helpful tips
If you have already bought your new-build home, there are a few simple things you can do to protect your position.
Keep your boiler serviced. Check the terms of your boiler manufacturer’s warranty and your new-build warranty, as you may need to have the boiler serviced annually to keep the warranty valid. Keep copies of your service records.
Have a snagging inspection. Even if you have been in your home for some time, it is worth considering an independent snagging inspection before the end of the developer’s two-year defects period. A professional inspection can identify defects or poor workmanship that you may not have noticed yourself and give you a list of matters to raise with the developer.
Report problems promptly. Don’t wait until a defect becomes serious before telling the developer. Keep a written record of anything you report, together with photographs where appropriate, and retain copies of the developer’s responses.
Your new home should be covered by a warranty for a number of years, but it is important to understand what that warranty covers and to make sure you comply with any requirements that apply to you