How Purchasing a New-Build Property Differs From a Standard Residential Property Purchase

Purchasing a new-build property can be highly attractive to buyers due to the lack of a conveyancing chain and the reduced likelihood of needing maintenance work. In addition, new-build properties are usually highly energy efficient.

According to the National House Building Council (NHBC), new home registrations increased by 25% in the first quarter of 2022 compared to the same period in 2021. In addition, data from the Office for National Statistics showed that over 200,000 new-build homes were built in the UK in the financial year ending March 2022, a trend that is showing no signs of slowing down.

Newly-built homes are particularly appealing to first-time buyers as they can access various schemes that assist them in entering the property market. However, it is crucial to acknowledge that new-build properties carry a higher risk of potential complications. The conveyancing process for purchasing a new-build property involves additional considerations and unique challenges.

To navigate these complexities successfully, it is essential to engage the services of an experienced property solicitor. At Beverley Morris & Co., our experienced residential property solicitors specialise in assisting clients with the specific challenges associated with purchasing new-build properties. We offer comprehensive guidance throughout the process, addressing aspects such as planning permission and snagging lists.

In this article, we consider common questions and highlight some key factors when purchasing a new-build property.

What constitutes a new-build home?

New-build properties are houses, or other domestic residences, that are newly constructed and have never been lived in before. If an existing property has been renovated to the extent that little of the original property remains, then this may also be considered a new build.

It is possible to purchase a new-build home in two ways:

• Off plan, which involves purchasing a property before it is built. In this case, the purchaser will typically see the plans for the property and visit a show home to gauge the layout and key features.
• Buying a completed property, which involves purchasing a property just after it has been built.

What schemes are in place to support buyers when purchasing their new build?

The government has several schemes in place to support first-time buyers and existing homeowners to purchase their new build:

• First Homes

Launched in 2021, First Homes is designed to assist local first-time buyers and key workers onto the property ladder by offering new-build homes at a discount of between 30%–50%. Reduced rates will apply to the homes included in the scheme forever, allowing buyers on low incomes to continue to benefit every time the property is sold.

• Deposit Unlock

Allows buyers to purchase a new-build property with only a 5% deposit. With this, buyers must get their mortgage through a participating lender.

• Shared Ownership

By using shared ownership, a buyer can purchase a portion of a property, allowing them to focus on saving for a deposit and securing a mortgage corresponding to the share of the property they intend to acquire.

• Help to Build

This scheme offers support to people looking to build their own home.

• Other Incentives

In addition to the schemes outlined above, many housing developers offer incentives to encourage people to buy their homes, including:

• Paying the Stamp Duty Land Tax on behalf of the buyer.
• Paying the legal fees on behalf of the buyer.
• Paying the rent on a shared ownership property for a set time.
• Supplying soft furnishings or offering free design upgrades.

Why is purchasing a new-build property different from buying an older property?

There are several ways in which the purchase of a new-build property differs from the purchase of an older property, including:

• The property may not have been built at the point of purchase.
• It is likely that the buyer will purchase the property directly from the developer rather than from a private individual.
• The purchaser will likely need to pay a non-refundable reservation deposit when committing to buying a new build.
• In general, the process of buying a new build is significantly quicker than the process of buying another type of property.

Do you need a solicitor when purchasing a new build?

Although the process is generally shorter when purchasing a new-build property compared to that of buying an older property, there are some key differences in the process that should be addressed by a legal professional to ensure that the process runs smoothly. These include:-

• Due to the nature of the transaction, there is often a high volume of complex documentation involved in a new-build property purchase. Therefore, instructing a specialist solicitor will ensure that the process runs as smoothly as possible.
• In a typical new-build transaction, the developer expects contracts to be exchanged within 28 days of when the property was reserved, meaning a quick turnaround process where the support of a legal professional is essential.
• Several essential searches need to be conducted. These help ensure that the developer has obtained the necessary planning permissions and that the property has been constructed in full compliance with those permissions. In addition, the conveyancer should identify any restrictive covenants outlined in the lease or registered against the freehold that may affect future alterations to the property or its use.
• A new-build conveyancing solicitor should also assist the buyer by ensuring the necessary provisions are in place to protect them should anything go wrong, for example, by introducing appropriate snagging provisions into the contract and ensuring that all legally required documentation will be supplied on completion.

Solicitor for New-Build Property Purchase

At Beverley Morris & Co., our team has extensive experience guiding and assisting clients throughout purchasing a newly-built property. We offer convenient, efficient and jargon-free conveyancing services across South East London including in Blackheath, Lewisham, Hither Green, Kidbrooke, Eltham, Deptford and surrounding areas.

To speak to a member of our well-established property team today, please call 020 8852 4433 or email enquiries@beverleymorris.co.uk.