It’s the age-old homeowner debate – should you buy a new build or an older property?
According to the Office for National Statistics’ (ONS’s) latest UK House Price Index, the average new build price is £329,801 meanwhile an existing resold property goes for around £247,967.
So, to help out any potential buyers, we’ll take a look at everything you need to know about buying a new build, including what a new build is, the process of buying, and the most asked questions on new build properties.
What is a new build?
New build properties are houses or flats which haven’t been lived in previously – even a property with contemporary features isn’t considered a new build if it has had previous owners.
As with any property purchase, new builds are either a leasehold or freehold, and it’s crucial to understand the difference between the two. Generally, a new build flat is often a leasehold property while a new build house is generally freehold.
New builds can be great for many reasons. Firstly, they offer a completely fresh start and can even be bought ‘off plan’ thus allowing you to have some input in the design process.
Additionally, they tend to have the latest tech and are generally much more energy efficient than older homes. Not only that, but new builds are chain-free which takes a lot of the buying stress away.
Buying a new build
So, if you want a new build – here’s how the process goes:
- Find your new build
Once you’ve decided on a budget, next you need to find a development you like and do some research into the area along with the developer’s recent record.
Sometimes properties are still under construction, but this is totally normal. In this case, you’ll likely view a show home that is a close match or exact replica of your potential new house or flat.
- Make an offer
Time to make an offer. If accepted, you’ll pay a reservation fee which holds the property while it’s still under development. Don’t worry though, this fee is taken off the eventual purchase price, but is usually non-refundable if you withdraw.
- Agree on the details
After finding your dream home and agreeing on a purchase price, you’ll need to go through the legalities, making sure to use a solicitor with experience in handling new builds.
Once you know the property has access to roads, services, and sewers, you can begin applying for new build mortgages.
- Move in
Last but not least, once your move is agreed upon, you’ll be presented with two terms: short-stop date and long-stop date.
The short-stop date is when your developer anticipates building work to be done and the long-stop date is a later deadline dictating when work must be completed by. Before finalising the deal, make sure you’re happy with these dates.
Frequently asked questions – New Build FAQs
Have questions about buying a new build? Some of the most common questions to ask are below:
When do you exchange contracts?
Exchanging contracts is the legally binding bit and for new builds, this can often mean waiting for development to finish, with timeframes varying.
You should only exchange contacts once you’ve finalised your mortgage agreement and made arrangements to make the requested deposit, which is usually 10% of the purchase price but can reach 25%. Generally, you’ll be able to exchange around 28 days before the completion date.
When do you start paying council tax on a new build?
As new build properties are often unfurnished, including no fixtures, fittings, or utilities, it might take a few weeks to move in.
Fortunately, if your new build is unoccupied and initially uninhabitable, you’ll receive a 100% council tax discount for the first month after the development is completed. However, after this period you’ll be subject to the standard council tax rates for your area.
What if there’s a delay?
Even with short-stop and long-stop dates, there are instances where developers still struggle to hit completion deadlines. If this happens, your solicitor should have signed a warranty agreement protecting your deposit.
You may even be able to withdraw completely and claim a full refund.
To conclude new builds certainly have their appeal, but there are certain things you should know when purchasing a new property ranging from the benefits to the buying process.
Potential buyers, particularly first-time buyers, may not be aware of some of these things – therefore, we hope our guide will help people make an informed decision on whether or not to buy a new build.
For more information on new builds, click here.
Ross Counsell is a chartered surveyor and director at GoodMove
You can learn more about the Help to Buy: Equity Loan scheme, which is designed to help first-time buyers purchasing new build properties, here.
