The Ultimate Guide to Buying a New Build Home
A new home is always a welcome addition to the family. Somewhere you hope to call your forever home and somewhere you can make your mark. This is even more prevalent with a new build home. You are the first in and it will echo your character as you mould it to the way you want it. No previous inhabitants mean you start with a blank canvas.
If you have your eye on a development in your area, or perhaps further afield and are considering selling a house in order to make your next property plans come to fruition, read on to learn all about buying a new build.
Buying a new build home
As with everything you put substantial money behind, you will always encounter pros and cons and a home is no different.
According to the Homeowners Association there were close to 50,000 new homes built in Q1 of 2021, an amount that has not been reached in over 20 years! This means more and more people looking to buy a property are stumbling across new builds where they may not have done before. It is likely they will cost more but as a result you end up with a sparkly brand-new house! Let’s assess the pros and cons:
Pros of buying a new build
- Everything is new so you can just unpack and move in-no need to paint, repair or throw out!
- In some cases, the developers want to push the sale through so may cover things estate agents may not, stamp duty, deposits and even furnishings can be covered in some cases.
- Chain-free is something everyone buying a home loves to hear. Everything just runs a little smoother without a chain.
- Lower bills, especially in this time of high utility costs are a godsend to anyone. Newer buildings tend to have a much better rating on their EPC than older properties resulting in cheaper bills and potentially a cheaper mortgage if you can secure a green mortgage.
- A new build is in effect a new product, so like when you buy a computer, or a car, you are protected with a warranty. You won’t get that if you buy an existing property.
- You can design it yourself if you buy off plan. Some builders allow this, meaning you have a say in the layout and fittings.
- There are a variety of ways to buy, meaning it is easier to get on the property ladder. Deposit unlock, help to buy, and shared ownership are all schemes supporting first-time buyers.
Cons of a new build home
- New builds are sometimes packed tightly among lots of other properties within the same site. Developers want to maximise their revenue potential and as a result the properties can be smaller or offer less space externally. Rooms and driveways can both be smaller than hoped.
- Drop in value can hit a new home quickly after you move in. The speed with which new build homes are appearing means your home may not be as appealing to those looking to buy when they spot a newer home just across the road.
- Management charges can be expensive and many new build estates are looked after by management companies. This means that any shared spaces are paid for by the owners of properties within the estate. These costs can fluctuate and there isn’t much homeowners can do about it. Add this expense to your mortgage and the outgoings can soon mount up.
- Poor quality builds are not going to be in the majority of cases but the speed the properties are built has led to defects being found that catch the owner unaware. In most cases these can be minor issues but occasionally there could be structural defects. You can always have a surveyor check for issues once you are allowed on site. They can then inform the builder to ensure the issues are sorted.
- A delay can mean you don’t get to move in when you hoped. You rely on the builders to complete buy a certain date but sometimes that date isn’t met. This could be something you can easily deal with but, you could be paying extra rent, extra storage costs and spending more on utilities whilst you wait
These are just some of the pros and cons and all are worth considering when it comes to buying a new build home.
Buying a new build home process
Just like with any property purchase there are a few steps you need to work through before you can put your foot in the door.
Finding your new home
In many cases, a new build home will be bought “off-plan.” This is where the property has not yet been fully built, or even built at all. Viewing these is a little different as you may visit a show home or view some plans for the building instead.
These are the properties where you may have some more creative licence to design certain elements of the layout.
A huge benefit of buying off plan is the potential for the house value to increase to more than what you paid for it before you even take a step inside.
Reserve your home
Once you have located a development that meets your needs, you need to reserve your patch so to speak. Costs vary buy you can expect around £1000 of your budget to be used up on this.
Complete and organise any paperwork
One of the more boring elements of a house move but a very crucial one. Appoint a conveyancer and get your mortgage locked down. Unfortunately, as mortgage agreements in principle can tend to last up to 6 months you need to have a clear idea of where the completion date is likely to fall. Speak to your mortgage provider about extensions as a result of delays or enquire as to whether a specialist mortgage for new builds is available.
The wait to move in
With any off-plan project there is a lot of waiting around, you’ll no doubt be keen to get the keys. There are two dates to look out for here and one could benefit you financially but have you without your new home for longer. You may be informed of a short stop; this is the date where the developer expects to have the project completed. The long stop is where they have to complete by. If you manage to agree on a long stop date then if the house is not completed by that date, you may be entitled to compensation.
The final steps
In the weeks running up to the completion date, keep in contact with your conveyancer to ensure everything on the legal side is ticking along nicely. As long as all is good you are pretty much ready to move in. As we mentioned earlier though, get a snagging survey organised so any issues with the property can be recorded prior to you moving in. Saving you money further down the line.
When do you pay a deposit on a new build house?
With any property transaction there is a deposit needed. Whilst you may have paid the approximate £1000 reservation fee, don’t let yourself think that this is the property deposit. They still work in the same way as if you were buying an already existing property. As the completion dates nears and the conveyancer finishes the paperwork you will exchange contracts. It is at this stage you pay your deposit.
Can you decorate a new build house straight away?
When you move in you will be keen to make the house your own. Afterall you may have helped design part of it. This is a new building though and as such, it hasn’t yet dried out. This means things such as wallpaper and paint are best left for between 6 and 12 months before adorning your walls. If you were to rush into decorating your new build house, you could end up causing more damage and find yourself facing substantial repair costs.
How much can you negotiate of a new build house?
A new build home may be more expensive than an already established building, but you may see an opportunity to shave some of the asking price off the home you have your eye on. Before going in and offering way under the odds, or taking the first price and accepting it, do some research. Look at other new builds in your area to get a rough idea of house prices. You may find that yours falls way under the asking price of others! Also consider how long they have been marketed for and see how many properties complete the development. If the new build is to be an off-plan property, the team building it need to secure finance to be able to enable their borrowing that allows them to pay for the other properties on the development. This means there is more opportunity for a little negotiation!
Look as to when the financial year ends for the company building the property. If you are looking to buy when that date is approaching, you may be able to get a little discount in there as they aim to smash their sales targets.
When a development has just a few spaces left, the team working there are desperate to sell, this would be the opportune moment to put in a slightly lower offer as they are aware time is running out!
These are just some of the parts involved with buying a new build home. If you are in the market for a new home, whether it’s new build or not, speak to the team at the nation’s leading online estate agent. SOLD help you buy and sell property and never charge a penny to get you moving. Contact us today to find out more.