Buying a new home off-plan is becoming more popular and it can have financial advantages for the buyer as developers usually offer a discount on the market price. The services of an experienced residential conveyancing solicitor are however essential to protect the buyer’s interests.
Buying off-plan means that the home is not completed. Buyers can choose a particular plot and often have the opportunity to personalise aspects such as flooring choice and bathroom appliances.
Although these are advantages, and the developer or builder’s price reductions may be as high as 20% if a property is reserved early, there is the potential for significant problems to occur.
The final home may not be exactly how you envisaged. If possible, it is wise to visit similar developments by the same company before committing to a purchase and to check on the quality of management and workmanship. If you move into the new house while others around are still being built, there will be a lot of noise, dirt and inconvenience from the continuing work.
The developer’s motivation in selling off-plan is usually to secure finance for continuation of the building work. Once a potential purchaser has decided to buy, a reservation fee will be due and an agreement drawn up subject to exchange of contracts within an agreed time scale, usually 21 or 28 days.
Before a purchaser reaches this point, they should have arranged a mortgage or other finance and instructed a conveyancing lawyer. If the deadline is missed the developer has the right to withdraw some of the incentives originally offered or even refuse to continue with the sale.
The reservation fee (of probably £500 or £1,000) will form part of the deposit, which is usually 10% of the total price, and the balance of that will be due on exchange of contracts. The next stage is build completion, followed by legal completion when the remainder of the purchase price is paid.
When a new home is reserved the builder should give some indication of a completion date; but there is no guarantee it will be finished when specified because of factors such as the weather. The purchaser will be given 7 or 14 days’ notice at the end of the build for moving in.
Most new homes are given a 10-year warranty against defects, usually from the National House Building Council (NHBC), which proves that they have been inspected before being signed off, and this covers subsequent major structural issues. If the house is sold within the period of the warranty, the certificate should be passed to the new owner.
Minor defects or ‘snags’ can be a more contentious problem because there is no monitoring system or specific standard for quality of finish. Where possible, it is advisable for a timetable for correcting snags to be written into the contract in order to press the builder to remedy them as soon as possible.
Buying a home off plan with Healys
With a rising UK population, new homes are continually being built both on large estates and small infill developments. Most will have opportunities for buying off-plan, requiring the services of an experienced residential conveyancing solicitor to ensure an efficient transaction.
If you use Healys, all the pros and cons of buying off-plan will be explained in plain English and you can be assured not only of expert attention to the legal details of drawing up contracts, but you will also be kept informed of all progress.
Should any difficulties arise after the sale, Healys has the expertise and the ability to advise and give practical assistance.
For more information and advice on costs of Healys’ conveyancing services, you can request a call-back via the website or email firstname.lastname@example.org.