Zoopla's comprehensive guide reveals all you need to know about snapping up a new-build property.
New-build homes are a popular option for many people across the country. From first-time buyer homes and bachelor pads, to family houses and retirement homes, there is plenty of choice for buyers.
Of course, getting onto the housing ladder is one of the biggest financial commitments you probably will ever make. So Zoopla's buying a new-build house guide will walk you step-by-step through the process.
Buying new-build vs old
There are many advantages to buying a new-build home. Here are some of Zoopla's top reasons:
You can get in early: Many house builders and developers offer properties off-plan, which means you can choose and reserve your dream home before it is even built. The choice...is yours, as Cilla Black famously said on her Saturday evening TV show, Blind Date. And if you buy off-plan in an area where house prices are rising, you could benefit from equity growth before you've even moved in.
- You can build it around you: You will be able to make your own mark on a new-build home, knowing that it has been untouched by previous owners. Some house builders and developers offer buyers the opportunity to design their new home from scratch. This could range from the position of doors, cupboards and plug sockets, to the style of the wallpaper, garden landscaping and the colour of your kitchen worktop. The sooner your reserve your new home, the more choice you have. You may have to pay extra for this so study the small print carefully.
It's 'low-mo': There is no need to carry out repairs, maintenance and redecorate when you move into a new home. In fact, any such work is likely to be unnecessary for at least the first few years.
You get cover: The home may well be registered with the National House Building Council (NHBC), in which case it will come with a 10-year warranty and protection scheme. Other companies that provide warranties and insurance for new-build properties include BLP.
It's flexible: You will not be part of a chain, which means you will be able to proceed with the deal to buy a new home at your own pace. You can move in as soon as you like without waiting on buyers in an upward chain.
Bills are cheaper: Homes are typically built and fitted with the latest energy efficient appliances, which means they're cheaper to run than many older properties. They tend to be well insulated and double or triple glazed.
It's secure: Top safety and security measures will also be in place due to the high building standards now required of new-build properties. These tend to include fire safety, locks on doors and windows, security lighting and alarms. You may also find entry phones in new housing developments.
Types of new-build properties for sale
You will find a wide variety of new-build properties for sale. To make the search less daunting, draw up a list of your requirements. Make sure you take into account what you need in a new-build home both now and in the future. Some of the more popular types of new-build homes are listed below.
- Flats are a popular choice for buyers living in towns and cities. Many flats are found in high rise developments. And some of the most exclusive apartments and penthouses, in London in particular, come with the very best facilities. They can include underground parking, concierge services, private gyms and spas, reception desk, and residents-only clubs.
- If the urban lifestyle appeals, then you may want to consider a smart townhouse. It means you can enjoy easy access to shopping, nightlife and entertainment in the town or city centre.
- If you have or are planning to start a family, then why not consider a spacious house designed specifically to cater for family life? They often come with large gardens for children to run around in.
- There are also homes designed to suit a range of retirement stages. New-build properties built for the elderly often have features such as a mobility scooter charging room, for example. Some retirement villages and retirement homes come with onsite managers and a 24-hour emergency call centre too.
You can search for a wide range of new-build properties for sale across the country on Zoopla.
Looking at show homes
Most house builders and developers will have a show home to illustrate the quality and finish of their properties but bear in mind this one will be a result of their best work! So get a tour of the site as well as the exact style of property you plan to buy (even if it is on another housing development). It will help you get a better picture of what your new home will be like in reality.
Dealing with off-plan property
It is possible to buy a home off-plan, which means that it has not yet been built. This has many advantages, not least allowing you to be involved with your new home from scratch.
However, to avoid disappointment, it is advisable to agree a long stop completion date with your house builder or developer. It means that if the property is not finished on time, you will be entitled to compensation.
Delays can not only be frustrating but they can also potentially cause problems when it comes to your mortgage lender.
Mortgage offers typically last between three and six months. You should make sure that the completion date is within the duration of the mortgage offer. Otherwise, you may find that the offer becomes invalid. Some mortgage lenders may provide an extension to the offer.
It is also possible to find mortgages that feature longer validity periods for new-build properties.
Don’t forget the new-build home checklist
You should ensure that your contract allows for a snagging provision. The term is used for detailing minor issues, repairs or defects. When construction on your new-build home is finished, make sure you carry out a complete inspection of the property and alert your house builder or developer to anything that needs fixing.
Here are some potential issues to look out for:
- Plumbing and electrics
- Walls, floors and ceilings
- Fitted furniture
Peace of mind with a new home warranty
Unlike older, re-sale properties, new-build homes usually come with guarantees. Many house builders and developers offer a warranty and protection scheme from the National House Building Council (NHBC). Cover can help you to secure a mortgage as well as providing peace of mind and potentially financial savings in the long run.
For example, Buildmark, NHBC's 10-year new home warranty, includes:
- Pre-completion insolvency cover: You are protected if your house builder or developer becomes insolvent once you have exchanged contracts to buy one of their new homes.
- Cover for the first two years’ of ownership: Your house builder or developer is responsible for rectifying certain damage. You will also be able to use the resolution service and NHBC guarantee if the firm neglects their responsibilities.
- Insurance cover for parts of your new home: You have cover for specified areas of the property, such as damage to floors, staircases, drains and windows, from the third year of ownership through to the tenth.
Other firms that offer warranties and insurance include BLP and LABC.
But that’s not all. The Consumer Code for Home Builders has been established to make purchasing a new-build home fairer and more transparent for buyers. It applies to all building firms that are registered with the UK’s major new home warranty providers.
The code stipulates that your house builder or developer must provide all the necessary details for you to make an informed decision about buying a new property.
They are also required to give you a transparent and easily understandable contract.
Your house builder or developer must give you reliable information about the timings around construction, completion and handover of your new home. You will be entitled to your reservation fee if you encounter unreasonable delays.
The code extends to an after-sales service too.
If you are unhappy with your new home or your house builder or developer, the Consumer Code for Home Builders provides an independent and low-cost dispute resolution scheme that will determine your house builder’s responsibilities without the costly process of taking your case to court.
Support and incentives available on new-build properties
There are many schemes in place to help buyers secure a new-build home.
The Government’s Help to Buy scheme helps first-time buyers and homeowners in England to buy a new home or an older property. There are similar schemes in place in Northern Ireland, Scotland and Wales.
The equity loan element of Help to Buy is applicable to new-build properties only. You will need to secure a minimum 5 per cent deposit while the Government will provide a loan of up to 20 per cent of the value of the property.
The second part of Help to Buy was the mortgage guarantee. Under the scheme, the Government offered lenders the opportunity to buy a guarantee on mortgages. However, this form of insurance closed as of 31 December 2016.
Former Chancellor George Osborne confirmed the Help to Buy Isa for first-time buyers in the Budget 2015. It gives a £50 bonus for every £200 saved to buy a new-build or existing home. A maximum of £3,000 will be available on savings of up to £12,000.
One of the Government’s other initiatives is Starter Homes. First unveiled in 2014, the Government promised to build up to 200,000 new homes by 2020 and offered a 20 per cent discount to first-time buyers under the age of 40.
Alternatively, shared ownership allows qualifying buyers to purchase a stake of between 25 and 75 per cent of a new-build home from a local housing association. You then pay an affordable rent on the proportion of the property you don’t own.
You will find that house builders and developers also offer their own incentives to help sell their new housing developments. They vary from company to company and can include:
- Paid Stamp Duty Land Tax
- Paid deposit
- Free fixtures and fittings, white goods, interior design advice or landscaping
- Part-exchange deals, where the house builder or developer purchases your existing home from you and sells it on
- Assisted sale, where the house builder or developer helps to sell your existing property. They will typically arrange for an independent valuation and then market your home through their sales department and an estate agent.
Top tip! Keep a close eye for the end of your house builder or developer’s financial year. It may be a good opportunity to negotiate a lower sales price or secure good incentives if the firm needs to hit targets.
Tips on how to boost the value of new-build properties
You will buy a new-build house at its very best. Therefore, new homes tend to drop in value in the same way a brand new gadget would. Here are a few suggestions of how to offset this issue:
- Add value by developing the property further. There is clearly more scope for this on a new house rather than flat. You might think about building a loft conversion, double-storey extension or a conservatory on the back of your home.
- Think ahead and buy for the future. If you are planning to start a family, a one-bedroom pied à terre is unlikely to be an appropriate purchase, for example. So buy a spacious house that will suit you in years to come and cut out a potential move in between.
- Negotiate with house builders and developers to agree the best price. You may find offers on the last homes to be sold in a housing development, for example.
- Shop around for the best deal. House builders and developers often offer a range of incentives (for more, see above) so it’s worth doing your homework and calculating which one will offer you the best deal. Remember to research house prices on portals, such as Zoopla.
Phil Spencer's tips on buying a new-build home
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