5 Things You Should Know When Buying a New-Build Home
It’s the question that every home buyer will ask themselves: “should I buy an older house or a brand new one?” We’ve already explored the pros and cons of buying an older home, but what about purchasing a house that has only just been built?
The benefits of buying a brand new home make a rather convincing case. The house will have been built to the very latest standards and comply with all energy-efficiency requirements, which means a good quality build and lower bills for you. There’s also no onward chain, modern homes tend to have more storage space and it’s a completely blank canvas for you to put your own stamp on. On the other hand, advocates of older homes will say that modern homes lack character and unique features, and are usually considerably smaller compared to homes that have been standing for a good few years.
Whatever your opinion on new-build homes, in light of the Autumn Budget statement that was delivered on 25th November 2015, it looks like we’re going to be seeing a lot more new houses appearing. During his speech, the Chancellor vowed to build 400,000 new homes by the end of the decade.
Given that the number of people purchasing new-build homes is likely to rise as more become available, we started thinking about this unique buying process, as often you will be spending a huge amount of money on something that isn’t even there yet! So we spoke to two couples who had both bought a new-build home whilst construction was ongoing to find out what they would do differently if they had to complete the process again.
1) You MUST get an independent inspection
Despite the relatively high satisfaction rating reported with new-builds, the Home Builders Federation’s national new home customer satisfaction survey found that 93% of new-build buyers reported problems (snags or defects) with their home after they moved in. 27% of people disclosed that the number of issues they encountered was more than they expected.
While it certainly cannot be guaranteed, it is likely that many of these could have been solved and prevented if a professional and independent inspection had been carried out. Many people rely on the housebuilder’s site management team to conduct an inspection, as new homes must be constructed to the relevant building and warranty standards, but this doesn’t always identify the full scale of snags that may be present.
So, what can you do? Many people advise getting a professional to inspect your home before you legally complete, rather than after. Seek advice from the conveyancing solicitor handling the transaction on how to go about arranging such an inspection, particularly if you encounter difficulties with your builders. Once an inspection has been carried out, you will receive a list of snags and a report that you can then present to the builders for rectification.
2) Think: Do you really need that change making?
No doubt you will be invited to view the property before you complete and move in (and if you aren’t, you should!), and you may spot a couple of changes that you want making before the finishing touches are added. A light that just isn’t quite in the right place, or a plug socket isn’t in the perfect spot, small things that can make a big difference.
One of our case studies named Emilie, who purchased a new-build home earlier in the year with her boyfriend, said that arranging internal changes to be made was the biggest issue she came up against. They found that the task of moving a plug socket from one side of the living room to another set them back £70.
Looking back, Emilie recommends really taking the time to decide whether it is worth making an internal change. She advises prospective homeowners who are looking at new-builds to ask themselves whether they could really live with plug sockets or lights where they are. Can you work around it? Or does it absolutely have to move? Compromising on the little things could save you money and hassle in the long run. Naturally, it really helps if you have a rough idea of how you want to set up each room before the build is fully completed.
3) Not negotiating on price or incentives
One couple we spoke to, Nicola and Dave, who purchased a four-bedroom new-build home, thoroughly recommended being prepared to negotiate with the developers. Yes, they will have a price list for homes (and there’ll be no shortage of other takers if you pull out) but don’t be afraid to try and talk them down – you could use the money you save to splash out on some new furniture.
If the developers don’t budge on the price, then your next port of call should be to ask about the incentives they offer. Almost all developers will have these ready to differentiate themselves from their competitors, and they can range from paying your legal fees, free furnishings or taking care of your stamp duty.
In many cases, taking an incentive such as those listed above will save you money in the long run compared to asking the developer to reduce the price, as the latter may impact how much your lender can give you.
4) Consider the construction process
This one depends entirely on your preference. If you’re keen to move in and are a little more restricted on price, then consider purchasing one of the first homes on the new estate to be completed. You will often find that houses bought at the start of the building process are much cheaper than those that are built later. The only downside is that you may have to put up with a bit of construction disruption and mud for a while. On the other hand, if time isn’t of the essence and you can afford to stretch your budget a little further, then by all means wait for the entire development to be completed and move in dust-free.
5) Be prepared for delays
Even the smoothest of house-buying processes can run into problems that ultimately cause delays; it doesn’t matter whether you’ve bought a new-build or a Victorian terrace. And just because your friend’s or your cousin’s move went through quickly and they were in within a month of completing, it doesn’t mean that you will be. We recommend that you stay realistic when it comes to moving in, and be prepared to have your big day pushed back.
But that doesn’t mean that you take any and all changes lying down. In fact, the Homeowners Alliance recommends, particularly if you are buying a new-build “off plan” i.e. before the development is completed, that you get your builders to agree to a ‘long stop completion date’. This means that if your new home is not finished by that date, then you will be entitled to compensation.
Now, we’re not trying to put you off new-builds by any stretch of the imagination, as there is an equally long list of things to consider when purchasing an older home. However, if you believe that a new-build home may be on the horizon for you, then it could be handy to go into the process with real recommendations from people who have been there and done that. And if you are thinking of getting on to the property ladder with a brand new home, make sure you search for an expert mortgage adviser in the local area who will be able to help you along every step of the way.