It feels like we never have to look too far for the next crisis and the last days have been no exception.
The consequences of the Chancellor’s mini budget have been front and centre, with everything from government rebellions to emergency interventions from the Bank of England.
The almost immediate result of what was arguably a self-inflicted crisis created by the government, was that we saw severe interest rate volatility and lenders large and small begin to withdraw mortgage deals from the market – in some cases, deals agreed in principle at one rate were removed with borrowers asked to pay double the rate.
However, it’s important to try and take some positives.
Firstly, it is the business of lenders to lend and we have seen a return of deals to the market, albeit at increased rates.
Secondly, it’s easy to forget there are already home buyers in process whose deals have been agreed and it’s important they still receive the advice they need when buying.
Demand for homes is still high, and according to the latest Halifax House Price Index, whilst house prices have fallen 0.1% the annual increase is still 9.9%.
What are the advantages of buying a new-build home?
Buying a second-hand home does have its advantages but there is also the risk having to enter a bidding war with others.
This is just one of the reasons why many people, including first-time buyers, are opting for a new build home. In fact, 2021 saw a 20-year record broken for new homes built.
Price is of course one of the most important aspects of buying a home, and whilst the comfort of knowing you will be paying a fixed price is incredibly attractive that is not the only benefit of choosing a new build. There will also be no chain as you are the first person buying the property.
Naturally, it can be a nice feeling to know that you are the first person to live in property and as well as everything being shiny and new, additional costs such as decorating, are reduced.
Furthermore, in a lot of cases, a fitted kitchen and bathroom are part of the package and chosen beforehand.
There is also an opportunity to add some value, for example by landscaping the garden or installing a conservatory or creating a loft conversion. New builds also tend to be outside of a city so they often benefit from more outdoor space.
Energy bills (extremely topical at the moment) will likely also be lower with builders required to comply with the most up-to-date regulations regarding insulation or PV panels.
Furthermore, new builds will come with a 10-year NHBC warranty providing protection and reducing maintenance costs.
Most people will require a mortgage to buy a home and many builders offer a range of incentives such as a reduced deposit or even a contribution – it’s also not unusual to see offers of free flooring or kitchen and bathroom upgrades.
There are also a number of schemes available to help first-time buyers who wish to buy a new build such as Help To Buy and Golden Share (Scotland) and again, lenders can offer exclusive mortgage deals from time to time which are specific to new build homes.
Buying a new build – what to watch out for…
So, you’ve decided that a new build is your preferred option but what should you look out for?
Firstly, do some research: look at different builders in your area – what are the reviews like?
Some builders might pressure you to use a particular conveyancer – do not make any hasty decisions. Look around for a good deal with a reputable company.
When it comes to the plot, site plans can be confusing so go and visit the site and take a look at your exact plot location
Ask yourself some questions about what will be built around you – will this impact your garden or your view?
There can be long entry dates – a year is certainly not unheard of. Builders will expect a completion of legal contracts in advance so you may need to consider alternative accommodation in the meantime.
Snagging is vital – ensure it is part of your contract and that builders commit to cosmetic upgrades. Remember, pretty much every new home will some have little issues that need fixing once you’re in.
Most builders will offer a guarantee of two years or more for any issues that rise – this could even be for major problems such as plumbing, glazing or roofing issues. Be sure to check this.
Last but not least, factor or management fees are often charged to manage an estate and the communal areas – these can be expensive so factor this into your budget.
Overall, buying a new build home can be a cost effective and exciting way to buy a new home but the whole process can be complex.
Getting the right advice at the start could save you hundreds or thousands of pounds and a great deal of stress so seek out a qualified independent mortgage broker who can help you secure your dream home.
Darren Polson is head of mortgage operations at Aberdein Considine
