The ins and outs of new builds

Uber-modern or traditional? Cutting edge or shabby chic? Most people are clear on whether they prefer a new build or an older style home. Some benefits of a new build are obvious. Everything is fresh and brand new and if you’re buying off plan – before your property is actually built – you can choose design details like carpets, tiles, worktops, sometimes even the entire kitchen.

However, there are pros and cons to buying new, so it pays to do your homework and read up on developers and building companies. If possible, speak to friends or relatives who have bought new in the past to discover more about their experiences and get hints and tips on what to look out for.

The advantages…

Brand new homes adhere to the latest building regulations, so they tend to be more energy efficient than old homes. This could mean lower fuel bills. In addition, major repair jobs such as roofing shouldn’t be a factor for several years.

Every UK new build home should come with a 10 year NHBC warranty which covers structural defects. It pays to ask the developer if they provide their own warranty too.

As above, you might be able to choose your fixtures and finishes. It’s your chance to put your own unique stamp on the property ­– and enjoy being the very first owner.

The buying process can be smoother too when there’s no upward chain to worry about.

You may be able to choose your plot or position and ensure yours comes with a unique selling point – useful when you come to move on. This might include an attractive view or access to outside space, like a balcony or garden. A parking space, garage or driveway may also be considerations.

Some disadvantages…

There is likely to be a period of disruption while the overall development is finished, so it could feel as if you’re living on a building site if you occupy one of the first phases.

Snagging – teething problems with the build or its fixtures and fittings – tend to be a common feature of new developments. A reputable developer should move quickly to sort these out, however.

It’s hard to know exactly what the property will look like when it’s built. Some developments will have a show home available but not all will offer this before units go on sale. Occasionally, a development’s appearance can be different from the artist’s impression. Plans and brochures aren’t always entirely visually accurate.

Room sizes in new build homes can be smaller than those in older properties. Compare the measurements to rooms in a home you’re used to, as a guide, to ensure your belongings and furniture will fit neatly into the new space.

Mortgage offers often come with a time limit – construction hold-ups could see an offer expire. Make sure you keep talking to your lender.

Consider your deposit size - lenders may limit the maximum percentage of the purchase price that they will lend on. The maximum loan-to-value we allow is 85%.

Is part-exchange the answer?

If you’re selling and buying and want to move quickly, some house builders will let you use your current property as part payment. These part exchange schemes can remove the hassle of selling your home the traditional way but there are some watch-outs to be aware of.

You might find the price you’re offered is below market value, so it pays to have your own valuations done before agreeing to a deal. In addition, the rules can be rigid – you may only be able to use part exchange for up to 70% of the price of the new home. This will have a bearing on the mortgage amount you might need to borrow. If this is the case, our mortgage experts would be happy to talk you through your options.

Case study:

Susan Anderson, a graphic designer from Edinburgh, never thought she’d be in the market for a new build until she started to look around. “Not in a hundred years did I think I’d buy a new build until I went to see a renovated Victorian cottage. When I thought about it afterwards, I realised that what I loved about the property was that everything inside was brand new. That got me considering a new build. After all, you don’t live on the outside of a house, you live on the inside.”

Susan eventually bought a spacious city centre maisonette off plan. “I wanted a ground floor place with outside space. And I didn’t want to have to redecorate or replace bathrooms or kitchens. This way I got to specify the fixtures and fittings I wanted.” 

The downside was that the development wasn’t finished on time and was several months late. “I’d already sold my flat but it wasn’t a problem for me as I had somewhere else to stay. However, I can imagine the delay might have caused issues for other buyers. Now I’m in, I’ve never been happier – I love my new home.”

What is a decision in principle

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The material contained in this article is intended for information purposes only and not as advice.

You should obtain professional legal or other advice if you are unsure about the effect on you of any matter in this article

Published: 26 January 2018

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