New-build homes are an increasingly popular option for buyers across the UK. They come with plenty of benefits, from better energy efficiency to 10-year warranties and even smaller deposits.
Getting on to the housing ladder is one of the biggest financial commitments you'll probably ever make. So could a new-build home be the right option for you?
Let's talk a look at the benefits, process of buying and everything else you need to know about new-build homes.
What are the benefits of buying a new build?
1. You can buy a home before it’s built
Many house builders and developers offer properties off-plan.
This means you can choose your dream home before it's built, or even before construction has begun.
It's a great way to buy into an area you love or where demand for properties is high.
You'll want to speak to a mortgage broker to check you can borrow what you need. Then once you've found the perfect new-build home, you pay a reservation fee - usually around £1,000 - to reserve it.
You can even exchange contracts and pay your deposit off-plan, then just wait to hear about the completion date from the developer.
2. You can build-in your own preferences
Some house builders and developers offer buyers the opportunity to choose key design aspects of their new home.
This could range from doors, cupboards and plug sockets, to garden landscaping, tiling and the colour of your kitchen worktops.
The sooner you reserve your new home, the more choice you'll have. You may have to pay extra for personal modifications, so study the small print carefully.
3. New-builds are low maintenance
A major benefit of new-builds is that they're super low maintenance.
There'll be no need to carry out repairs, maintenance and redecorate when you move into a new home. Any work like this is rarely needed for at least the first few years.
4. Your home may be under warranty
If your new home is registered with the National House Building Council, it will come with a 10-year warranty and protection scheme.
Builders of new homes must follow either the Consumer Code for Home Builders and the New Homes Quality Code.
They usually require house builders to register with the UK's main new home warranty bodies: NHBC, Premier Guarantee, LABC Warranty and Checkmate.
These warranty bodies represent over 95% of the new homes built in the UK.
5. Buying a new-build is chain-free and more flexible
If you are a first-time buyer or not selling another property then you’re not part of an onward chain. This means you can buy a new home at your own pace.
Move in as soon as the home is ready or set a move-in date that works for you, without waiting on other buyers in an upward chain.
6. Bills are cheaper in a new-build
New research from the House Builders Federation shows that new build buyers could save more than £3,100 a year when the Energy Price Guarantee ends in June 2023.
It's because 85% of new-build homes have an EPC rating of A or B, whereas only 4% of older properties achieve this level.
Newer buildings tend to be very well insulated and double or triple glazed, which keeps draughts out and heating bills down.
And they usually have the latest energy-efficient appliances, which are cheaper to run than many older ones.
7. Safety comes as standard in a new home
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, alarms, gated entrances and entry phones in new housing developments.
8. Developers offer incentives to buy their new-build homes
Some house builders and developers also offer their own incentives to attract buyers.
These sorts of incentives vary, but may include:
Paying your stamp duty
Paying your deposit
Free fixtures and fittings, white goods, interior design advice or landscaping
Part-exchange deals, where they buy your existing home and sell it on
Assisted sale, where they help to sell your existing property.
Such incentives help house builders and developers to hit targets. Keep an eye out for these deals throughout the year to see what you can get.
9. Buying schemes are available for new-builds
There are several schemes available to help you to buy a new build home.
The newest scheme, Deposit Unlock, has just been launched by the house-building industry to enable first-time buyers and second-steppers to buy a new-build home with just a 5% deposit.
17 house builders, from Barratt to Vistry, are taking part and the scheme is available to help you buy any house or two-bedroom+ apartment.
Shared Ownership is a government scheme that offers you the chance to buy a share of a property from a housing association.
Because you only own a part of the property, you can buy it with a smaller deposit and mortgage. You’ll still have to pay rent and some fees on the parts you don’t own.
The First Homes scheme launched in 2021 to help local first-time buyers and key workers onto the property ladder by offering new-build homes at a 30% - 50% discount.
The reduced rates will apply to the homes forever, meaning that buyers on a low income will continue to benefit every time the property is sold.
The government has pledged a further 10,000 properties will be added to the First Homes scheme every year.
To qualify for the First Homes discount, buyers need to meet certain criteria:
You must be a first time buyer. That means that anyone who has ever inherited or been gifted a home is ineligible.
You must earn less than £80,000 (or £90,000 in London), whether you're buying solo or as part of a couple.
The property you’re buying must cost no more than £250,000, or £420,000 in London.
You must already work or live in the area you’re wanting to buy in, or have a connection to it. Say you grew up there or have family there, for example.
Key workers will be prioritised.
10. Extra protection is built into new-builds
Buyers of new-build homes can rest assured that there are comprehensive protections in place to ensure that homes are made to the highest quality.
Many house builders and developers offer a warranty and protection scheme from the National House Building Council (NHBC).
More than 90% of new homes built in the UK are covered under warranty by NHBC, Premier Guarantee, LABC Warranty and Checkmate.
This sort of cover can help you to secure a mortgage as well as providing peace of mind and potentially saving you money on repairs in the long-term.
For example, a new home warranty of 10 years might include:
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.
Insurance for parts of your new home: Cover for specified areas of the property, such as the structure itself will usually come as standard for a new-build home. 10 year warranties can also cover any damage to floors, staircases, drains and windows that takes place, beyond the homeowner's wear and tear.
Consumer code benefits
The Consumer Code for Home Builders exists to make buying a new-build home fair and transparent for buyers.
The code applies to all building firms registered with the UK’s major new home warranty providers.
The code is there to help you to make an informed decision about buying a new property. Your contractors or house builders are legally required to give you certain information.
They are also required to give you a transparent and easily understandable contract.
Your house builder or developer must inform you about the timings of construction and completion.
You are entitled to a refund of your reservation fee if you encounter unreasonable delays. The code extends to an after-sales service, too.
It also provides an independent and low-cost dispute resolution scheme. This will determine your house builder’s responsibilities without the costly process of taking your case to court.
What are the stages of buying a new-build?
Finding your property
Many new-build homes are sold off-plan. This means they have not yet been built. You might look at a show home or be shown extensive plans.
Off-plan has many advantages, not least allowing you to be involved with your new home from scratch. But, you might have to be patient.
Reserving your new home
Once you’ve found a development you want to buy a home in, you’ll need to pay a reservation fee to secure it.
The cost of this varies, but will usually be around £1,000.
Organising the paperwork
Your next task will be to appoint a conveyancer to deal with the legal side of your purchase.
It’s also key at this point to lock in your mortgage. But, this is slightly trickier than with an existing house.
This is because mortgage offers typically last between three and six months.
Make sure that your 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 in the event of a delay. You can find mortgages specific to new-build properties that have more flexibility built in.
Waiting for your new-build to be ready
It can take anywhere from a couple of months to a year or more before an off-plan home will be available to move into.
The short stop is the date the developer expects to complete and the long stop is the date the developer has to complete by.
Agree on a long stop completion date with your house builder or developer. This means that if the property is not finished on time, you'll be entitled to compensation.
Getting ready to move
In the weeks before your completion date, your conveyancer will need to finish the paperwork. You can then exchange contracts and pay your deposit.
Just before you move in, it’s a good idea to have a snagging survey conducted to check for any defects (see our checklist, below).
You can then move into your brand new home, safe in the knowledge that if there are stains on the carpet it was you that made them.
How do I make sure my new-build is up to scratch?
When you secure your home, make sure your contract contains a ‘snagging provision’. This is to cover minor issues, repairs or defects after completion.
When your home is finished, carry out an inspection and alert your house builder or developer to anything that needs fixing.
Key things to look out for include:
Plumbing and electrics
Walls, floors and ceilings
You can then let your builder know of anything that needs sorting or tidying up before you move into your pristine new home.