During your property search it is likely that newly built properties will come up for consideration, many prefer purchasing property that’s brand new and being the first owner but are there downsides?
Basing your purchasing decisions on the computer generated images within the glossy brochure and the plush show flat can seem risky. New build properties have been known to have inadequate storage, thin walls and small rooms, without seeing the property it’s hard to be sure.
We’ve helped many of our clients purchase new build properties over the years, here we consider all aspects of buying a new build property and what you should expect when buying one.
Buying off plan
Buying a property off plan means agreeing terms before the building work has begun, developers usually ask for a reservation fee at the time of agreeing the purchase. Exchange will happen relatively soon after the property is reserved with completion set for a future date when the developer expects to complete the build.
Some developers offer discounts for those who reserve a property before they’ve broken ground or during the build which can make it attractive to buy off plan. Committing to the purchase early might also mean you get to choose the finish and fittings throughout the property. The property could even increase in value whilst it’s being built, dependent on market conditions.
Buying off plan can also have it’s down sides; whilst you’re given a predicted completion date it may be delayed. And as much as the value can increase during the build, once you’re committed to the purchase you will have agreed the purchase price and it might be that the value also goes down whilst it’s being built. Do your research on both the area and the developer to ensure you’re making the right decision.
New build properties are often built in a location that could benefit from overall regeneration – are there plans in the pipeline for this from the local authority or the developer?
Big or small, researching the developer is a good idea in most instances to ensure they are a reputable company, it might even be that they’ve won industry awards such as those run by the NHBC.
Particularly important for those purchasing within an apartment building but also relevant for those buying a house in a development with communal areas and facilities – ensure you fully understand the service charges you’re committing to.
If you’re purchasing the property as an investment with a view to renting it out, you’ll need to include the service charge in your math to establish the true rental yield.
All newly built properties should come with guarantees and a 10 year NHBC Warranty or similar which is an insurance policy protecting buyers of new homes from any structural defects.
These policies can prove vital so be sure to establish what the developer will have in place. There can sometimes be cover which includes the building phase in case the developer is unable to complete the build.
Banks and lenders often require that a structural warranty is in place as a condition of the mortgage.
Around two weeks before completion you should be able to visit the property to conduct a snagging survey, there are also professionals who can conduct a new build survey on your behalf if you feel unsure of what you’re looking for.
The list of snags will usually include things that have not been correctly fitted or are broken so be sure to check absolutely everything, for example a missing hinge on a door or a loose tap.
There can sometimes be negotiations between the buyer and the developer where the developer does not see something as a fault or in the instance that you were unable to do any snagging until after you’d moved in they might argue you caused the damage yourself.
It’s useful to maintain a positive relationship with the developer where possible but in the instance of a breakdown in communications the warranty provider should step in and find a resolution.
If you’re buying a property within a larger development and are within an early phase of the build you might have to live with building works surrounding you after you’ve moved in.
Always ask about the completion of all works on a development. If they’re going to be busy building 7 days a week for the next 3 years right next door, it might affect your decision.
It’s also important to be wary of any nearby developments including those being built by other companies in case they will have an impact on the view from your apartment.
Buying new build property
Being the first owner in a property has great appeal, everything is brand new and in most cases you can choose the fixtures and fittings to match your preferences.
If you’d like help finding and buying a new build property our team of local experts would be delighted to assist, contact us, to learn more about our property finding service.