What You Need To Know About Buying New-Builds
Conveyancing Executive Lauren Fitzgerald from Healy LLP discusses the process and paperwork involved in new homes developments.
As a buyer of a new-build property you may well be intimidated by the process and by the volume of paperwork involved. That is where an experienced Conveyancer comes in. Conveyancing Executive Lauren Fitzgerald from Healys LLP really enjoys the potentially fast-paced transactions and level of planning permission issues involved in new homes developments.
Lauren is currently involved in several exciting projects. Mishon Mackay has just launched a stunning new development in Hove, ICon and Thakeham Homes have a new development at Valeside Keep in Burgess Hill. Nick Bell, Area Sales Manager at Thakeham says, “Recommending that purchasers consider using Healys for their legal requirements gives us confidence that their purchase is in the safe and professional hands of a quality Conveyancer who understands the demands of a new home purchase.”
The legal process of buying a new-build property is more complex than a regular purchase, and instructing a Conveyancer who understands new-build contracts, planning permission, building regulations and adoption of roads and sewers is vital.
You should also bear in mind the following:
- You cannot fix a completion date for a new-build property because the developer is unlikely to know exactly when the property will be finished. The developer will likely complete upon providing you with ten working days’ notice that the property is ready. If you have a property to sell, it’s wise to discuss this with your buyer at an early stage since they are likely to expect a fixed completion date.
- Prior to completion, you should be given the chance to inspect the property to prepare a snagging list. Take as much time as possible on this and provide the developer with a detailed list of all unfinished tasks. The developer is likely to stipulate in the contract that they will be allowed access after completion to deal with snagging.
- Developers will, reassuringly, usually provide a 10-year new-home warranty. For the first two years of the policy all defects are covered. Thereafter, only structural defects are covered. It’s prudent to have a survey carried out before the expiry of these first two years so that any issues can be referred to the new-home warranty if the developer fails to carry out the necessary remedial work.
- New Stamp Duty (SDLT) rules were recently introduced to try to level out the property market. For purchasers buying second homes, or investors buying to let, there will be an additional 3% SDLT payable on top of the usual SDLT. Some developers will incentivise you to purchase the property by offering to pay your SDLT for you. Always ask whether such incentives are offered.
To make your purchase as smooth as possible, remember to instruct your Conveyancer promptly, choosing somebody with proven experience of new builds.
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POINTS TO CONSIDER WHEN PURCHASING A NEW-BUILD PROPERTY:
- Show Home – remember that you are not purchasing the show home and that the developer will have spent a lot of money on finishing the show home to the highest specification.
- Mortgage – mortgage offers are usually valid for 3 or 6 months, so completion will need to take place prior to expiry of your mortgage offer.
- New Home Warranty – check to ensure that the property benefits from a new-home warranty.
- Reservation Fee – you may be required to pay a reservation fee on the property, usually for a period of 28 days. This will bededucted from the purchase price on completion.
- Affordable Housing – most new developments will include an area dedicated to Affordable Housing.