New Builds, New Challenges: The Extra Issues Involved in Buying a New Build home

New build homes are a popular choice for buyers. Not only do you get to avoid the conveyancing chain, but new builds are also less likely to need work or maintenance and are also usually highly energy efficient. 

New build properties account for a significant proportion of the UK’s housing stock as the house-building industry responds to demand. The National House Building Council (NHBC) shows that new home registrations in the UK increased by 25% in the first quarter of 2022 compared to the same period the previous year.

According to data from the Office for National Statistics, more than 200,000 new homes were built in the UK in the financial year that ended in March 2022, a trend that is not likely to show any signs of slowing down once the latest figures are released.

New build homes appeal particularly to first-time buyers, who can take advantage of several schemes open to them to help them get on the property ladder.   

However, the potential for something to go wrong is much higher with new build properties and there are several extra factors for you to consider in the conveyancing process and unique challenges you may face.

Instructing a specialist new build conveyancing solicitor is vital. At Russell & Russell, our experienced property solicitors are specialists in helping clients with the additional challenges that come with buying a new build property and will be able to guide you through the entire process, from planning permissions to snagging sheets.

In this blog, our new build conveyancing solicitors answer some questions you may have about buying a new build property and consider some things to look for to ensure you’re not just dazzled by that pristine paint job...

What is a new build home?

A new build house is a property that is newly constructed and has never been lived in before. Some existing properties that have been renovated to the extent that little of the original house remains are sometimes also considered new builds.

There are two main ways to purchase a new build home:

• Off-plan. Off-plan properties are sold before they’re built. You’ll usually see the plans for the property and be able to visit a show home to visualise how it will look.
• Buying a completed property. You can also buy a new property that has just been built.

What are the benefits of buying a new build home?

Buying a home is a personal choice and some people prefer new builds while others opt for older properties. There are advantages to each, but generally some of the most cited benefits about new build homes include:

• More energy efficient. New build homes must comply with the latest building regulations. This means they are far more energy efficient than older properties, which results in lower heating bills.
• Green mortgages. More than 80% of new homes have the highest A or B Energy Performance Certificate (EPC rating), compared to just 2.2% of existing properties. Better EPC ratings means you might qualify for a green mortgage, which can offer cheaper rates.
• No onward conveyancing chain. Having no chain can make the move a lot easier, quicker and less stressful. You also don’t have the risk of being gazumped or a seller pulling out when you have put in an offer.
• Warranties. All new builds come with a warranty, which you don’t get with an existing home. However, a warranty doesn’t always cover everything you might expect.
• Purchase schemes. There are certain schemes available to help with the purchase of new build homes.

What schemes are available to help people buy new build homes?

There are several government schemes available for first-time home buyers and existing homeowners. Some of the main ones for buyers of new build homes include:

Shared Ownership. This lets you buy a portion of a property, meaning you only need to save up the deposit and secure a mortgage for the share of the property you’re buying.

Deposit Unlock enables you to buy a new build home with just a 5% deposit. House builders can opt into the scheme and buyers must get a mortgage through a participating lender (currently Newcastle Building Society, Nationwide and Accord Mortgage).

First Homes was launched in 2021 and is designed 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. Certain criteria apply.

Help to Build offers support for people looking to build their own home.

In addition to these buying schemes, many housing developers will also offer incentives to help buyers to secure a new-build home. These can include:

• Paying the buyer’s stamp duty.
• Paying the buyer’s legal fees.
• Paying the rent on a Shared Ownership property for a set time.
• Free soft furnishings packages and other design upgrades.

What are the differences between buying a new build home and buying an older property?

New build purchases differ from the process involved in buying an older home in several ways, including:

• Unlike an older property, a new build property may not have been built, or is still in the process of being built, when you purchase it.
• Buyers are usually purchasing the property from a developer rather than a private individual.
• Buyers usually need to pay a reservation deposit, which is often non-refundable, when committing to a new build purchase.
• Buying a new build property is generally much quicker than traditional conveyancing.

Why do you need a specialist new build solicitor when buying a new build home?

New build conveyancing can be more complex than buying an older property. Some of the main differences include:

• Documentation. There are often high volumes of complex documentation involved in a new build property purchase. An experienced new build conveyancing solicitor will be able to help you ensure you have the relevant documentation in place for a smooth and stress-free purchase.
• Tight time scales. Usually, developers expect contracts to be exchanged within 28 days from the date the property was reserved meaning time is of the essence in new build conveyancing. For that reason, it’s advisable for buyers to have a mortgage offer as early as possible. 
• Searches. There are several searches relating to new build properties that must be undertaken as part of the conveyancing process. These include checking that appropriate planning permission has been obtained and that the property has been constructed in full accordance with it, that roads are properly adopted, and that drains and utilities are properly established. An experienced new build conveyancing solicitor will also highlight any restrictive covenants that have been written into the lease or registered against the freehold, which could, for example, prohibit any future alterations to the property.
• Snagging and warranties. Buyers of new build homes need to ensure that they have the necessary provisions in place to ensure they are sufficiently protected if anything goes wrong. An experienced new build conveyancing solicitor will be able to advise on the appropriate snagging provision that should be written into your contract and make sure that all contractual documentation is in order.

Buyers of new build properties should be particularly wary of developers trying to get them to use their recommended conveyancers to purchase a new build. Buyers should instruct a specialist new build conveyancing solicitor who is not partnered with the developer. An independent solicitor will ensure that the contract is in your favour, that your deposit is fully protected and that there is a ‘long-stop’ completion date for the property to be finished by. 

You can find out more about the new conveyancing process for new build properties on the Home Owner’s Alliance website, by clicking here.

New Build Conveyancing Solicitors Bolton and Chester

At Russell & Russell, our team of new build conveyancing solicitors have extensive experience in guiding clients through the additional pitfalls of buying a new build home and can help you navigate the process to ensure a successful completion. 

Our experienced team of solicitors offer efficient, convenient and cost-effective conveyancing services to clients in Bolton, Atherton, Bury, Chester, Farnworth, Horwich, Middleton and across the North West.

The firm is accredited under the Law Society Conveyancing Quality Scheme, which is the recognised quality standard for residential conveyancing practices.

For more information, or to speak to one of our new build specialists, please get in touch with Russell & Russell Solicitors. You can call us on 0800 103 2600 or make an online enquiry.

Please note that this article is meant as general guidance and not intended as legal or professional advice. Updates to the law may have changed since this article was published.

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Please note that this article is meant as general guidance and not intended as legal or professional advice. Updates to the law may have changed since this article was published.