What to consider when buying a new-build home
9th January, 2017
What do would-be buyers of new-build homes need to know about their prospective purchase? Property lawyer Diane Lawton takes a look.
There are many advantages of buying a new build home.
Modern Building Regulations Standards mean that house builders have to meet certain energy efficiency standards so your new home would have low running costs and be energy efficient.
Because the property would be brand new, there would be no existing occupier and therefore no chain. The new house would be a blank canvas and you would be able to choose fittings to suit your taste rather than inheriting somebody else’s.
Your home would have the benefit of a New Build Home Warranty which would, within specified time limits, have provision for putting right any damage caused by a failure to build to the property warranty standards.
If you have a property to sell, the house builders can often take your property in part-exchange subject to certain criteria. House builders may also offer attractive incentives, and the Government also offers certain schemes to help you buy a new build property, for example Help to Buy and the new Government plan – the Starter Home Scheme.
There are certain things you need to be aware of before buying a new build property. You will often be committed to buy the property before it is finished and ready for occupation, so you will not have seen it in its finished state.
Prior to completion, the builder will have a snagging process where you can check through the house with the builder and if there are any defects or issues, these can be dealt with.
When you exchange contracts on your new build property you will be given an anticipated completion date, but you must remember this could be pushed back if, for example, bad weather conditions delay the build programme.
If you are buying with a mortgage, your mortgage offer will have an expiry date so you need to be aware of this when looking at the anticipated completion date of your house. Most builders will work with you to make sure you do not fall foul of these time limits.
If you are one of the first buyers to move into a property on a new build development, you will need to take into account that building activity will be taking place around your new home.
Additional protections are also available to buyers of new-build homes. In April 2010 the Consumer Code for Home Builders came into force. The Code was written by a consortium of industry bodies and applies to all home buyers who sign a Reservation Agreement from April 1 2010, where both the home and the Home Builder are registered with one of the Home Warranty Bodies supporting the Consumer Code Scheme (it does not apply retrospectively).
The Code contains mandatory requirement and non-mandatory good practice guidelines for the Builder.
It aims to ensure that the home buyer is treated fairly, knows what service levels to expect, receives reliable information on which to make their decisions and knows how to access speedy, low cost dispute resolution arrangements if they are dissatisfied.
The Code covers various aspects of the purchase of the new build home including sales and advertising material, pre-purchase information, information about the New Build Warranty Provider and reliable and realistic information about when construction of the home may be finished.
There are also provisions covering after-sales service, complaints handling and dispute resolution arrangements, all designed to give buyers full information and additional peace of mind when purchasing.
* For more information on the issues raised by this article, please contact Diane Lawton.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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