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New Builds

If you’re looking to buy a new house then you might have considered buying a new build directly from a property developer. What are the advantages and disadvantages of this?

Advantages

New builds are particularly popular because there is no forward chain in the transaction and the price and plot are agreed in most cases before the property is built. This removes the possibility of a contract race and other barriers to the sale.

In most cases, developers will often set a deadline for the purchase to complete, however in our experience once a solicitor is instructed and the buyer can demonstrate that legal work has commenced then these deadlines are often extended. If you’re a first-time buyer then the transaction is much easier because you’re not reliant on the sale of your current property.

New build properties are built with modern specifications and everything is brand new. Some people find this favourable and to their taste as this is essentially a blank canvas. In essence, this means that there should be few changes for you which allows you to inject your own personality into the property. For the majority of people who purchase new builds there are various ways to make this affordable,: there are schemes such as the Help-to-Buy Equity loan and the housing association also offers a shared ownership option. We always recommend that you research your options and choose the route that best suits your preference and financial situation.

One of the other positive aspects about purchasing a new build property is that developers offer a warranty on some features of the home, including kitchens, boilers etc which is something that isn’t offered with an existing property. The other point to consider with a warranty is that if you purchase through the shared ownership scheme you may find that you’re not financially responsible for other aspects of the property so it is always worth discussing this with your solicitor.

Disadvantages

New builds also have their disadvantages so it is important to consider all options. Once you have lived in a property for some time it is of course no longer viewed as “new” for potential buyers. Equally, if development is still ongoing in your area people may wish to purchase a brand new home to ensure that they have the maximum warranty. There is also the risk that the property could fall into negative equity and this could pose a problem if you purchased using the Help-to-Buy Equity loan.

It is important to understand if the property is freehold or leasehold as some new build properties, such as shared ownership, are leasehold. We would always recommend that you fully understand what this means for you as there are extra long-term charges involved. One extremely important thing to discuss with your solicitor is the length of the lease as this should be a minimum of 90 years. The length of the lease will in most cases affect the sale price and could incur the need to seek a lease extension which will be an additional cost.

If you’re selling your current property to buy a new build property always bear in mind that there could be delays with the development process and your move-in date may change. It is always a good idea to have a contingency plan in place such as moving into temporary accommodation as this can be particularly stressful especially if you have a young family to consider.

In summary, like any purchase of property this is a personal choice. If you’re looking for a modern house with affordable options available then this could be the route for you. Either way, always do your research to make sure that the property you’re purchasing is right for you.

MJP Conveyancing Team

01603 877066 or 01603 877067

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company details
Addreess:
69 - 75 Thorpe Road,
Norwich, NR1 1UA
Phone:
01603 877066 or 01603 877067
FAX: 01603 230125
copyright © 2017 MJP Conveyancing. All Rights Reserved

*MJP Conveyancing LTD is authorised and regulated by the Solicitors Regulation Authority – SRA No. 590889 http://www.sra.org.uk/solicitors/handbook/code/content.page.

MJP Conveyancing Ltd is a company registered in England and Wales Registered No: 8026741 VAT Number: 157917571. A full list of the directors is available upon request. We use the word 'Partner' to refer to a Director of the Limited Company, or any employee or consultant with equivalent standing and qualification. Equality and Diversity Policy Equality and Diversity Policy Statement for Clients * - In calculating this we measure the average time it takes to reach the stage of exchange ( not the date you actually move in which is known as the completion date) from the date we receive the contract from the sellers solicitors or from when we send the contract to the buyers solicitors. This period can be longer when delays arise which are not within our control. We cannot guarantee that we can achieve this average turnaround time in all transactions. This turnaround time does not apply to leasehold and leasehold and new build transactions.