Whether you’re a first-time buyer or looking for your next home, a new build property could be a great option for you.
However, while there are plenty of advantages to buying a pristine new home, there are also some key considerations you’ll need to make before you commit.
Our guide outlines everything you need to know about buying a new build, answers some important questions and clears up some common misconceptions along the way…
What is a new build house and how do you buy one?
A new build house is a property that’s newly constructed and has never been lived in before.
Some existing properties that have been substantially renovated, so that very little of the original house remains, are also often described as new builds.
The process of buying a new build is much the same as any other property.
However, there are some differences you should be aware of before you commit to buying one:
1. Research developments and find your home
If you’re keen to explore buying a new build, there are two ways you can do so:
- Buying off-plan.
- Buying a completed property.
Off-plan properties are sold before they’re built.
That means you’ll probably look around a show home and be shown the plans for how a property will look.
The alternative is to buy a property that’s already been built if one is available.
Whichever you decide, make sure you thoroughly research the development you’re exploring and take your time to decide if buying new is right for you.
2. Pay a reservation fee to secure your property
Unlike buying an existing ‘old build’ property, when you buy a new build home, you’ll need to pay a reservation fee to reserve it once you’ve agreed a purchase price with your developer.
This is often around £1,000 and means the developer will take the property off the market and stop viewings from other potential buyers.
3. Organise your mortgage and choose a conveyancer
Once you’ve agreed your purchase price and paid your reservation fee, you’ll need to finalise your mortgage and select a solicitor or conveyancer.
If you’re buying off plan, you’ll need to think about how long your mortgage offer is valid for.
Most mortgage offers last between three and six months, so if your property is unlikely to be completed within that timeframe, you may have to reapply with your lender.
When choosing a solicitor or conveyancer, it can be worth opting for one that has extensive new-build conveyancing experience.
Developers are often keen to exchange contracts and complete very quickly and this can create stress and pressure.
With an experienced new build conveyancer representing your interests, can help to alleviate this.
4. Pre-move snagging
As your move-in date edges closer, it can be a sensible step to have a snagging survey carried out at your new build home.
A snagging surveyor will highlight any defects or issues with your property and the developer can then rectify these before you move in.
You’ll also be able to conduct additional snagging after you’ve moved in, while your new build home warranty should also help protect you if your developer fails to remedy issues with your home in the first two years you own it.
5. Exchange and complete
Once your property is ready and all legal work is complete, your conveyancer will exchange contracts and agree a move-in date with the developer’s solicitor.
On the day you move in, your developer will hand over the keys to your new home once all money has been transferred between solicitors.
Are new builds worth it?
There are a whole host of benefits that come with buying a new build – but that doesn’t mean doing so is right for everyone.
Alongside those many advantages are a number of disadvantages you’ll need to weigh up:
Advantages of buying a new build
- Low maintenance – A new build home should come with far fewer initial maintenance issues and no need for renovation, meaning you can move straight in and start enjoying your new property.
- Modern appliances – New builds are usually kitted out with modern appliances and technology, meaning you shouldn’t have to pay for replacements or repairs for many years.
- Developer incentives – To sell their properties quickly, developers will often consider incentivising buyers to commit to a purchase. This could mean they upgrade your appliances or fixtures and fittings, or even pay your stamp duty.
- Energy efficiency – New builds are constructed to modern energy efficiency standards and the latest building regulations. This means your home should have an A or B Energy Performance Certificate (EPC) rating and should cost you less to run.
- No chain – Because you’re buying a new build, there will be no onward chain, meaning your purchase has much less chance of falling through.
- New build warranties – New build properties come with builder warranties that usually last 10 years and include protection from developers going out of business and damage to your home’s major features and structure
Disadvantages of buying a new build
- Price premiums – New builds sometimes lose value once they’re no longer classed as new, meaning if you sell within the first few years of buying, you could lose money.
- Lack of space – New build homes often lack space when compared with more traditional properties. Bedrooms can be smaller, while outdoor space is also often at a premium.
- Build quality and snagging – Snagging is hugely important when you buy a new build, with some developers criticised for the quality of their finish and for their aftersales service when rectifying defects.
- Off–plan delays – Construction of new build homes can sometimes be hit with delays, and this can have a big impact if you have to move out of your existing property by a certain date, or you have a mortgage offer that’s due to expire.
Tips for buying a new build
Buying a new build is a slightly different process compared with purchasing an ‘old build’ home.
And because you’ll be dealing with a developer rather than a traditional seller or estate agent, it’s important to do your research.
Our tips for buying a new build can help:
1. Always negotiate on price
You can negotiate on a new build purchase price just as you would if you were buying an existing home from a seller on the open market.
Like a new car, a new build property has the potential to decrease in price the moment you slide the key in the front door for the first time.
And that means if you decide to sell your home within the first two or three years of ownership, you might struggle to meet the price you originally paid.
By negotiating a lower purchase price with your developer, you’ll immediately be lessening the impact of any depreciation in value over the next few years.
Of course, it’s up to the developer if they wish to accept a lower offer or politely decline it.
But if you feel a new build’s asking price is excessive, you should consider pitching a lower offer.
And if you can negotiate on price, consider other areas you can benefit from.
Developers will often throw in furnishings, or offer to pay legal fees or stamp duty, and that can result in huge savings.
2. Be on top of the market
When considering a lower offer for a new build, it pays to know how much clout and bargaining power you have before doing so.
Research the development if it’s new to you and find out how many other homes have been sold and for what price.
If few homes have been sold because the market is slow, you should certainly consider a lower offer.
Also consider the time of year.
Early spring, with the financial year ending at the end of April, is often a good time to negotiate with a developer.
3. Think long term
New build property purchases work best as an investment if you’re going to live there, or rent out the property, for a long time.
So, with that in mind, be certain that the property meets your requirements both now and in the future.
Will you be starting a family in the future? If so, is the property big enough?
And while you might not be thinking of extending the property now, would this be possible further down the line, both to add value and add space if you need it?
4. Research your developer
Always do thorough research into the developer building the property you’re interested in.
This will help give you peace of mind that the build quality is good and that your property works for you as an investment as well as a home.
Look at online reviews and ratings of previous properties or developments the builder has worked on and consider things like aftercare as well as build quality.
5. Factor in potential build delays
If you buy a new-build property off-plan, delays to building work can be an issue, particularly if you are moving out of another property or you have a mortgage offer that’s due to expire.
Unfortunately, delays to building work to happen, often due to long spells of poor weather in the UK or construction supply issues.
But you should always make sure you’re protected should a delay occur.
That means asking the developer to agree to a ‘long stop’ completion date.
If your home is not completed by that date, the developer will be liable to pay you compensation for the delay.
6. Getting a mortgage for a new build
While getting a mortgage for a new-build property shouldn’t be a problem, sometimes issues can occur.
For example, mortgage offers are usually only valid for a set period of time.
So, if your new build is not completed on time and your offer expires, you may have to go through the application and assessment process again.
Lenders, meanwhile, will sometimes be stricter on the amount of money they are willing to lend on new builds.
This is due to any depreciation in a new-build property’s value early on and is simply a case of the lender protecting itself.
7. Snagging on your new build
Be sure to carry out thorough ‘snagging’ on your new build, or even have a snagging survey carried out before you move in.
Snagging is a hugely important phase of the buying process and is a real opportunity for you to correct anything you’re not happy with:
- Is the paintwork consistent, or too thin, or patchy?
- Is the plastering smooth, with crisp joints?
- Is the brickwork clean, with smooth pointing and a uniform design?
- Are all fixtures and fittings installed as they should be? Be sure to check all cupboard doors and drawers to ensure they work as they should
- Do the windows open and, most importantly, close properly and are there any scratches on the glass panes?
- Are the kitchen worktops smooth and fitted correctly? Are they level?
- Check all taps., switches and sockets. Does everything work as it should? When running taps, look out for signs of leaks.
- Are the roof tiles correctly laid and all guttering and downpipes fitted correctly?
Questions to ask when buying a new build
When researching developers and properties you’re interested in, it’s crucial to ask plenty of questions.
Find out as much as you can about the development, the developer’s history and exactly what you’ll getting if you buy a home from them.
Here are 10 key questions you should always ask your developer:
1. What other developments have you worked on?
When looking at any new development, even by well-known, established build companies, always ask to see other work they have completed.
If a complete or ongoing development is within driving distance, take the time to go and see it and speak to the sales team while you’re there.
You’ll want to be sure they have a good reputation before you commit to an off-plan home.
2. What do I get with my new build?
Buying off plan means your new home is likely to be just a foundation or, at best, the framework of a house – so there’s very little to see.
- Ask for a list of everything the property includes.
- What white goods are included, and will the garden be landscaped?
- In the case of flats, does your purchase include a parking space?
Finding out exactly what you get in writing before signing away on a sales contract is hugely important to avoid confrontation further down the line.
3. What does the new home warranty include?
The majority of new build homes come with a build warranty from either:
- The National House Building Council (NHBC)
- Local Authority Building Control Warranty (LABC)
- Premier Guarantee
Around 70% of new build warranties are issued by the NHBC and most last for 10 years from your completion date.
The first two years of your ownership is covered by a defects insurance, with structural insurance covering the first 10 years.
Because build warranties are essentially insurance policies, this means you have to make a claim if you have any problems with your property and may have to pay an excess.
Try to find out what the warranty on your new home includes and ensure that your snagging list can be remedied directly with the property’s developer.
Also make sure that warranties and guarantees for white goods supplied with your new build home are handed over to you.
4. Is the property freehold or leasehold?
If you’re buying a new build flat or apartment, it will almost certainly be a leasehold property.
This means you have a lease from the freeholder to own the property for a certain amount of time.
This is usually between 90 and 999 years on new build properties.
Leasehold flats often come with rules and regulations from the freeholder when it comes to things like major alterations or keeping pets – often due to other people living in the building, too.
Find out what you will be paying in maintenance and ground rent, and whether it rises every few years, and go through the terms of the lease to make sure you are happy with everything before committing.
Also, keep an eye out for new build houses being sold as leasehold and be wary of them.
The government has said it will ban leasehold new build houses being sold in the future, but in the meantime, establishing the terms behind what you are buying, for both flats and houses, is vital.
5. How many other properties have been sold and who has purchased them?
Find out from the home builder how many units have been sold and ask who has purchased them.
This will help to give you an idea of who your neighbours will be should you follow them and buy a property.
Are the properties being purchased by families or have property investors snapped up most of the development, meaning many homes will be rented out?
6. Are you open to offers?
Always ask the developer if they’re willing to negotiate on their asking price.
If you’re still keen to buy, try making an offer or asking for some additional extras if paying the asking price. Some developers will pay things like Stamp Duty – which could result in a huge saving for you.
As with anything, if you don’t ask, you don’t get…
7. Will you put a long stop completion date in place?
If you’re buying off plan, there’s always a chance that your property might not be built as quickly as you hoped.
That can cause problems with mortgage companies, whose offers are usually only valid for a maximum of six months.
This means if your new build home is delayed, you might have to reapply for a mortgage.
And if your circumstances have changed, for instance if you have a new job, that could affect your borrowing ability or even your ability to get a mortgage at all.
With all of that in mind, speak to the home builder and ask for a long stop completion date to be inserted in your sale contract.
This means if your property is not ready by a certain date, you are entitled to compensation.
8. Are there any restrictive covenants?
Restrictive covenants are sometimes used by home builders on large developments to prevent homeowners from changing the appearance of their property, so everything remains ‘uniform’.
This could mean carrying out extension work or making other changes to your home won’t be possible.
These covenants usually stay with the property, too, so can impact on your ability to sell when you come to.
Find out if any restrictive covenants are in place before committing to buying your new build home.
9. Are there plans to extend the development?
Always ask the developer about their future plans for the development.
If they have plans to extend it and build more homes, this could affect your property and its outlook.
It could also affect things like noise and access if more people are set to move into the area.
Make sure you ask your developer if there are plans to build more homes in further phases.
10. Can I use my own conveyancer?
Some developers may try to pressure you into using their own conveyancing solicitor.
This helps them to control the time taken to exchange contracts and complete but may not be in your best interests.
Ask your developer if you can use your own solicitor or conveyancer – which you should always be able to do.
Frequently asked questions about buying a new build
Buying a new build is a big step, so here are the answers to some common questions from buyers:
Is Help to Buy only for new builds?
It was only possible to buy a new build home under the Help to Buy scheme, which closed to new applications in October 2022.
The equity loan scheme, which saw the government lend first-time buyers 20% (40% in London) of the value of a new build home, closed completely in March 2023.
Do you pay stamp duty on a new build?
Stamp duty applies to new build homes, just as it does any other property.
How much you pay in stamp duty will depend on the purchase price of your new build, and whether you’re a first-time buyer, existing homeowner, or landlord.
First-time buyers are exempt from stamp duty on the first £425,000 of a property’s purchase price, up to a maximum value of £625,000.
Do new builds lose value?
New build values can depreciate in the short term, simply because they are no longer ‘new’.
So, if you’re only planning to stay in your property for a short period time, a new build may not be right for you as an investment.
Much of your new-build’s success from an investment point of view will come down to your purchase price – so always negotiate.
When do you pay a deposit on a new build?
Your developer is likely to require between 10% and 30% of your property’s purchase price as a deposit when you exchange contracts.
The remaining balance of your purchase will then be paid on the day you complete.
Is buying a new build a good investment?
Long term, buying a new build can be a great investment.
Even though you may pay a premium to own a new home, this is balanced out by savings you’ll make through low maintenance costs and not needing to renovate.
However, new builds do often depreciate in value initially, so for a new build to be a good investment, you’ll need to own yours for several years before you consider selling.
Are new builds more expensive?
New builds do often come with a price premium for being ‘new’.
However, you can negotiate with developers, who may be willing to accept a lower price or be prepared to cover some of your other costs as an incentive.
Do new builds go up in value?
Over the long term, a new build home has the potential to go up in value.
They’re often kitted out with better quality appliances and are usually more energy efficient than older homes, so will always be popular with buyers.
Exactly how much value they grow by will often depend on ongoing demand for the type of new build home you buy, as well as any improvements you make which could increase how much its worth.
Do you need a survey on a new build?
Although surveys are generally regarded as more important when buying older properties, having one on a new build can also be a good idea.
A basic survey will tell you that everything is as it should be with your new build, while a professional snagging survey is also advised.
A snagging surveyor will list any defects with your property before you move in and can even help to arrange repairs with your developer.
Can you extend a new build?
While it’s possible to add an extension to a new build home, it can be complicated.
In many cases, developers add restrictive covenants to their developments, meaning you may need their permission to add an extension within the first five, 10, or 20 years you own the property.
This can vary and is not always the case – when you buy a new build, you solicitor should highlight any covenants to you during the conveyancing process.
It’s also likely you’ll need planning permission for an extension.
This is because permitted development rights, which often allow homeowners to extend without permission, are removed from new build homes.
How to find new build homes
If you’re looking to buy a new build to live in or rent out, or you’re looking for land to build a new home, we can help through our nationwide developer links.
