With the government pledging to build one million homes over the next five years, more of us look set to buy a brand new home in the future.
Matthew Sabine residential property expert with Warners Solicitors offers some advice for you if you are thinking about buying a new build property.
Make sure you know what you are buying
Your new home may not be complete when you agree to buy it. If you are buying the house ‘off plan’, it will not yet exist at all or may only be partly built. Instead, you will be relying upon the developer’s plans and specifications.
The developer may provide a show home to showcase what the completed properties should look like. However, this could be very different, in terms of plot location, size, and even finish, from the house you eventually move into.
It is important, therefore, to be as clear as possible about the specifications of the property you are buying. Check your property’s size and dimensions, the plot location, and pin down exactly what the developer is including or what constitute ‘optional extras’. If you have any doubt, speak to your lawyer who may be able to assist with clarification.
Consider the development as a whole
On a new development, consider the facilities and overall mix of properties, which should be there when it is completed. Ask about the developer’s timetable for finishing the estate. You may find your property will be ready a long time before the whole development is complete, especially if there are several phases to the development.
As with any property purchase, your lawyer can check compliance with planning and building regulations, although some issues may remain outstanding when you complete your purchase and the contract should provide for these to be complied with. Nonetheless, particular issues may arise with new developments. For example, planning conditions often prevent any property from being occupied until the estate roads are completed.
Your lawyer can also check that there are adequate provisions for drains, roads and shared facilities like street lighting, and that these will become publicly maintainable. Sometimes individual property owners have to contribute towards the cost of shared facilities through a service charge, especially if there are communal facilities or a private road or ‘open space’. The developer should disclose from the outset what the service charge entails and the likely cost and and which should be covered in the legal documentation.
Check whether the property is freehold or leasehold
Last year, over 40 per cent of new build properties were leaseholds. Traditionally, most flats are leasehold as it is an effective way of dealing with responsibility for a shared structure. However, an increasing number of new build houses are also now leaseholds, especially if there are shared facilities.
If your new home is leasehold, you will usually have to pay ground rent as well as a service charge. You may also need the consent of your landlord, or a management company, before you can alter or sublet your property. These will incur additional costs and could affect your use of the property. Discuss the potential implications with your lawyer before committing yourself.
Protect against potential defects
Most reputable builders will offer an insurance policy, or warranty scheme, against major structural defects for a ten-year period. Your lawyer should check that the policy meets your lender’s requirements, and explain any limitations to you.
It is also common for new builds to have some minor defects on completion, commonly known as ‘snagging’. For example, the plaster may have cracked in places as the structure settles. Generally, you will not be able to delay completing your purchase because of this. On the other hand, your lawyer may negotiate a provision for the developer to agree a snagging list of minor defects with you and to remedy them within a defined time frame. It is important that you discuss any such matters with your lawyer before you exchange contracts.
Choose the right conveyancer
If you are buying from a developer, they may try to recommend their preferred legal team.
It is more important, though, to find an independent lawyer who will put your interests first. Ideally, choose someone experienced in conveyancing new build properties. They will be familiar with your lender’s requirements and other issues specific to new builds.
Do not delay discussing your purchase with your lawyer. They can ensure the developer is legally bound to complete your property in accordance with the agreed plans and specifications, so you avoid any nasty surprises.
They can also check that the plot plan agrees with the Land Registry’s records. Unfortunately, it is not uncommon for plot boundaries to alter as a building estate develops, without the necessary changes being recorded at the Land Registry. Resolving any discrepancies early on can keep your purchase on track and prevent disputes in the future.
Remember, contracts for newbuild properties often include a clause allowing developers to alter layouts or boundaries but they will only have to consult the buyer if such alterations have a major impact on the value or amenity of the property.
If you are interested in a new build property, or buying or selling a house, contact Matthew Sabine conveyancing solicitor/lawyer in our residential property team. Telephone 01732 770660 or email firstname.lastname@example.org
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.