Purchasing a new build home comes with many advantages, including offers of deposit contributions (sometimes known as a deposit boost) from the developer, greater energy efficiency, fewer property chain complications, and the opportunity to move into a brand-new property that has never been lived in before.
While these are all great incentives, buyers mustn’t overlook the more complex aspects of new-build property purchases.
Below, our residential conveyancing team provides some information on what these are and why they are important to consider.
What Are the Differences Between New Builds and Standard Home Purchases?
Regardless of the type of property you are purchasing, there are set legal procedures (formally known as conveyancing) that must be followed. However, buying a new-build home often involves several other legal matters, risks, and complex issues that require careful consideration, including:
1. Developer Contracts and Additional Documentation
A developer will often include specific clauses and conditions in a contract regarding various matters, including the expected completion dates, snagging issues, warranties, or developer obligations. These are not typically involved in a standard property transaction, and you should speak with your conveyancing solicitor about how these might affect your purchase, how your rights are protected, and if you should negotiate any of the terms.
New builds commonly involve various other documents, not normally involved in traditional house sales, such as:
• National House Building Council (NHBC) certificates
• Building regulation certificates
• Fixtures and fittings guarantees
2. Purchasing a Property Off-Plan
In a traditional property purchase, a buyer has something physical to inspect. You can walk around the property, inspect the neighbourhood, and generally get a feel of what your new home will feel like to live in. However, off-plan properties are bought before construction is complete, meaning the buyer must rely on show homes, virtual viewings, architectural plans or visualisations, and promises from the property developer.
Buying a property off-plan also affects the standard transaction timeline. In a standard property purchase, unless unforeseen complexities occur, you can expect the process to take 2-3 months. Conversely, buying a property off-plan can be a much lengthier process, with buyers sometimes waiting years for their build to be completed. This situation can be particularly worrying, especially when contracts have been exchanged and large deposits have been paid. The main concerns revolve around potential construction delays that could affect the move-in date, or what would happen if a developer went bankrupt during the building process.
Obviously, there are several advantages to buying off-plan. For example, new-builds can be cheaper to buy at this stage, deposit boost incentives are often available, and there is always the chance your property will increase in value while it’s being built.
Involving your solicitor early on when buying a property off-plan is crucial. Your solicitor will guide you through the process and ensure you fully understand the risks involved and that you have all the relevant documents, protections, and safeguarding clauses in place should something go wrong.
3. Snagging Issues
Buying a brand-new home often means you can enjoy all the new fixtures and fittings that come with it, the opportunity to include specific design requests, and the benefit of moving into an energy-efficient home that stays cool in summer and warm in winter. But it is not uncommon for new builds to experience ‘snagging issues’ such as incomplete build elements or faulty design issues. Before completing the purchase of your home, it is important to understand the developer’s obligations in addressing and resolving any snagging issues that may arise before and/or after you move into your new home.
4. Are You Buying the Freehold or Leasehold
Depending on the type of new-build property you are buying, it is crucial to understand whether this is a leasehold or freehold property. While new-build houses are typically freehold, new-build flats are still sold as leasehold. However, there are ongoing plans to abolish leasehold for new flats and promote commonhold ownership instead. Understanding the tenure (freehold, leasehold, or commonhold) is a vital aspect of property ownership, and your solicitor will be able to advise you on what this means for you and the things that need to be considered with each of these types of property purchases.
5. Understanding Service Charges and Management Fees
An advantage of purchasing a new-build property is the access to shared amenities and communal spaces. Consequently, however, there will likely be maintenance and management fee obligations. There have been several legislative changes regarding leasehold properties, including what fees can be charged, and your property lawyer can review any contractual obligations and ensure these are fair and that you fully understand your responsibilities and ongoing financial commitments.
New Build Property Conveyancing Specialists
If you are about to buy a new-build home, especially if this is off-plan, we can help. Instructing us early on ensures you receive professional guidance and support from the start.
Our residential property lawyers have specialist expertise in new-build property transactions, and they will guide you through each step of the purchase process, keep you informed of progress and ensure you are fully apprised of the title purchased.
CQS Accredited Law Firm
Berlad Graham is accredited by The Law Society’s Conveyancing Quality Scheme (CQS), a recognised quality standard for SRA-regulated firms in residential conveyancing. It sets out the standards of competence, risk management and client service levels expected of practices.
If you are looking for a reliable and responsive conveyancing solicitor, get in touch with Berlad Graham today. You can call us on 0330 175 5655 or email: info@bglaw.co.uk.
To find out more about our residential property practice, click here.
