What to Look Out for in a New Build Home

Long before the cement is poured, here’s what to know about buying a new build house. 

New build homes are a great option, whether you’re looking for your first purchase, a house for your growing family or finding the right size in later years. But buying a new property is slightly different from traditional home purchasing. To help you navigate your way around new build buying, read on. 

What are new build homes? 

A new build property is one that’s brand new, recently built and has never been lived in before.  

There are many benefits to buying a new home, wherever you are in your property journey: 

  • You’re the first one to live in that property.  
  • Repairs and redecoration costs are typically minimal for the first few years.  
  • You can customise it to your taste. Select your preferred fixtures, fittings, carpets, lighting, and even integrated appliances and built-in sound systems.  
  • New homes usually come with guarantees for peace of mind.  
  • More and more, new homes are built to modern specifications, which are more cost-effective and energy-efficient. You can enjoy lower bills because of this. 
  • New homes come with a 10-year new home (NHBC) warranty to protect home buyers from the cost of any structural defects during that time. 
  • New homes are chain-free. 

What to know before you buy a new house 

Unsure of where to start? We’ll walk you through the whole process of buying a new build home in the UK, from finding housing developments to dealing with delays. 

Prep your finances 

Whenever you’re looking to buy a home, old or brand new, the first thing is to make sure you can afford it. Look at your current financial state (debt, income, credit score, etc.) and make sure it makes sense to buy a home right now. Remember that you’ll also be responsible for maintaining the property, which can be a financial shock if you’re used to renting. 

To quickly determine how much you can afford to spend on a new home use our calculator. It doesn’t impact your credit score and you get an instant figure of your affordability. 

Speak to a mortgage adviser 

Once you have your financial ducks in a row, speak to a mortgage adviser. Ask to get a mortgage agreement in principle – which is where they confirm the amount they’re willing to lend you.  

If you’re interested in a new build home, ask your lender when the mortgage offer will expire. If there’s a chance you’ll complete on a home after the expiry date, you may want to talk to your lender about what options are available.  

Talk to a mortgage adviser who can help you work out what you can afford.   

Find the right new home 

Do a little searching around your chosen area for new builds. There may be homes already built or new developments coming soon. When looking for a new build, you have the option of buying “off-plan”, which means buying a home that hasn’t been built yet.  

Reserve the property 

Once you’ve found a home that you’re happy with and you’ve organised your finances, you can secure the property. You’ll need to pay the developer a reservation (this can range from £500 to £2,000), and it will reserve the home for a 28-day period. During this time, the developer will aim to exchange contracts.  

Once the purchase completes, the developers will deduct your reservation fee from the final price.  

Keep in mind that if you don’t exchange contracts within those 28 days, or if the purchase falls through completely, you will forfeit your reservation fee. This means it’s very important to have your mortgage agreed in principle before you pay to reserve the home.  

What to look out for when buying a new build home: 

  • Warranties 

As mentioned earlier, most new build homes come with a 10-year NHBC warranty which covers major structural defects. Keep in mind that these policies attached to your property are essentially insurance policies with excess to pay. If you make a claim, there may be costs to pay. On top of that, many developers will give you a warranty for a shorter period of time, such as 2 years. Keep an eye out for what warranty they offer and what is/isn’t included. 

  • Snagging 

Make sure that there’s a snagging provision in your contract to allow you to get minor issues sorted directly with the developer. These things can range from cracks in walls, loose guttering and doors catching on carpets. At some point between exchange and completion, you’ll need to conduct a snagging survey to make sure everything’s fixed before moving in. 

If you don’t feel confident putting a snagging list together yourself, you can employ the services of a professional snagging firm. It’s another cost to consider, but a snagging survey can be worth the extra expense. 

  • Added premiums 

It’s easy to get carried away with money when you know the house you want. But try to keep a level head and make sure that you’re getting a good deal and are paying a fair price. Also, keep an eye out for any extras that have been thrown in. Sometimes new builds will cover stamp duty tax or legal fees in addition to other perks. These can be a nice bonus, but always ensure you know what you’re getting and paying for.  

  • Leasehold vs freehold 

Knowing whether your new build home is freehold or leasehold is essential. But what does that mean? Leasehold means you have a lease from the freeholder to use the home for a number of years (such as 90 or 120 years) – and there are often conditions, such as alterations, subletting and owning pets.

Leaseholders are responsible for paying maintenance and buildings insurance, and usually have to pay annual ground rent. If you’re buying a new build flat, you’ll have no choice but to buy it on a leasehold basis. Your solicitor will be able to make sure there aren’t any unfair restrictions before you exchange contracts. 

  • Moving delays 

Unfortunately, building can be fraught with delays, especially if you’re buying “off-plan” (before the development has been completed). We recommend you get to know the developer’s schedule to make sure your home will be built on time. There are usually 2 dates to keep in mind: 

Short-stop date: The date by which the developers expect to finish building your house.
Long-stop date: When the developers must have finished the work. If it goes beyond this date, the developer will be obligated to pay you compensation.  

Delays with new builds can impact your financial situation.  

  • Workmanship and finish 

Check over the little details. Are the finishings what you expected? Is the workmanship neat and tidy? This is where your snagging survey can really help make sure you’re getting what you paid for. 

Find new houses 

Want to be the first to hear about new home developments built near you? Simply enter your email address and postcode in here and we’ll let you know.