Buying a New Build Home? Here’s What You Need to Know.

If you’re thinking of buying a new build home, you’re not alone. New build homes are growing in popularity, and it’s easy to see why – with warranties and maintenance often covered for a set period. Not to mention, it’s an opportunity to get your hands on a blank slate of a home which you can make your own.

But that’s not all there is to it. Newly built houses come with a few unique challenges that can trip up homebuyers that aren’t aware. Not you though, as luckily, we’re going to take you through the ins and outs of new builds in this guide.

Why buy new?

If the prospect of ripping up 60s-style carpets and tearing down dated wallpaper doesn’t appeal, then a new build could be for you. And there are a few perks to buying a new build home:

• No ongoing chain: When purchasing an older home, you might find yourself in a chain, or sequence of property sales. The house sales work like dominoes, with each transaction depending on the success of the one before. They’re not the end of the world, but as you’re relying on other house sales to complete on your own house, people tend to want to avoid them where possible.
  
  That’s where a new build home can be ideal. You don’t have to worry about relying on the old owners sorting out their finances and moving out on time. You select and move into your chosen property on a set timeline, taking away some of the waiting around and uncertainty that an ongoing chain can bring. 

• 10-year guarantee: All new builds come with a warranty of 10 years – something that you won’t find if you’re buying older properties. This means your home is protected against a few things, like structural or damp issues, flaking paint that wasn’t properly prepped, poorly applied render on your exterior, or big draughts. Although there’s a guarantee on some things, you’ll still need to ensure you’ve got the right level of buildings and contents insurance. 

• Eco-friendly: As they’re built recently, new build homes legally have to comply with the latest building regulations. This is a positive for buyers, as it often means they’re more energy efficient than older properties. And it’s not just a plus for your energy bills – a better EPC rating can also open up more mortgage options, as some lenders offer ‘green’ mortgages which boast cheaper rates.

• Affordability schemes: There are a few schemes in place that can help with the cost of buying a new build home. Some are from the government, like the First Homes scheme, Mortgage Guarantee, or Shared Ownership. Some are backed by developers themselves, like Deposit Unlock. Developers can also have their own incentive offers, like part-exchange deals, help selling your existing home, freebies for your house (like landscaping advice or free fixtures and fittings), or offering to pay your deposit or Stamp Duty. It’s always worth asking your developer what they can do, as these incentives also help the developers reach their selling targets. 

What’s the process of buying a new build?

Buying a new build isn’t so different from buying your first home or moving house in terms of the steps involved, but there are a few extra things to do. And remember, before you start browsing for a new home, it’s a good idea to secure a mortgage in principle.  

So, what’s different about buying new? Mainly, it’s in the process of viewing and reserving your home. 

Buying an off-plan home 

Many new build homes are sold ‘off-plan’, which just means they haven’t been built yet. If this is the case, there’s usually a show home you can view on the estate, and you can see detailed plans of the property you intend to buy.  

This option has its benefits, as you’re involved in the build from the very beginning and can make a few decisions as to how the home will turn out. There can be hold-ups though, as the timeline for your build may change due to building delays, which is out of your hands.  

You’ll usually be given a ‘short-stop’ date by the developer – this is when the builder expects the home to be complete, but it isn’t guaranteed. For this reason, you should also agree a ‘long-stop’ date with your developer. This means if the property isn’t finished by the long-stop date, you can pull out of the purchase and get a full refund.  

Making an offer on a new build 

Once you’re set on the home you want to buy, it’s time to make an offer. Like when you buy a brand-new car, you often pay a premium for a new build home just because it’s new. So, make sure to do your research. Compare the property to similar houses in the area – old and new – to make sure you don’t offer over the odds.  

Reserving your new build 

Choose your new home – tick. Get your offer accepted – tick. But these aren’t the only steps. You’ll also need to pay a reservation fee to secure your home up until you exchange contracts. 

Appointing a surveyor  

It’s a good idea to have a new build snagging survey done before you move in. This is an independent inspection of your new home that highlights issues the builder or developer might have missed. The survey typically costs £300 or more, but is often worth it, as if they do find any issues, the developer will need to address them before your completion and move in date. 

Getting a mortgage for a new build home

Finding the right mortgage can be tricky, especially with a new build. But there are a couple of things you can do to make the process run more smoothly.

• Use a broker. Due to the higher price tag often attached to new build homes, some lenders worry about them retaining value. This can mean you’ll face a cap on what they’ll let you borrow, or you might find it hard to secure a mortgage with your ideal lender. A Purplebricks Mortgage advisor can help you find a good deal for your circumstances. We know our available lenders and their terms inside out, so we know who’s flexible with new build mortgages, and have an idea of who you’re likely to get accepted with.

• Make sure your mortgage offer doesn’t expire too soon. Once you and your mortgage advisor have secured the right mortgage offer, it will usually last around three to six months. This means you’ll need to ensure your completion date lands within the offer’s timeframe. If you don’t complete on time, the offer will expire, and you’ll have to go through the application process again. Some lenders may offer extensions if you’re facing delays – although it’s not a guarantee. It can be good to have an advisor on hand to guide you through any potential hiccups.

Chatting to a Purplebricks Mortgage advisor will put you in good stead to get the right mortgage for your needs. Get in touch to kick off the process – it starts with a quick call.

Moving into your brand-new home

Once your mortgage is sorted and the legal work is done, you’ll soon be ready to exchange contracts and move in! If all’s well, your home will be completely finished, and you’ll just need to grab your keys and unlock your new home. But remember, if you do have any problems with your new build, it’s under warranty, so you can reach out to your developer if you have any unexpected issues.

Quick tips for new build buyers

• Research the developer. With an older home, the proof is in the pudding, and you can see whether the build has stood the test of time. You can even ask questions to the previous owner. With a new build, you might have to dig a little deeper. Check the developer’s reviews online, and make sure they are signed up to a code of standards. It means they have to build to certain specifications, and provides a way to raise complaints, if you have any. 

• Look at other sites from the same developer. One way to get a good idea of how good a developer is, and how their homes turn out, is to visit their previous or existing developments. You can even chat to residents and get their opinions on whether their new home and the buying process lived up to expectations.

• Give haggling a go. The price advertised by the developer, or on their site, isn’t always the best they’ll do. They want to get the new homes sold, after all. So, look at similar houses in the area, gauge how long their house has been on the market, and see what features other similar homes have (does your neighbour have more garden space, for example? Maybe you can use this to negotiate the price down).

• Compare the home to similar ‘old’ properties. You can get an understanding of whether you’re paying over the odds by looking at older properties of a similar build and size in the area. Check how their prices have changed over time, and what they’re worth today, to see whether the home you’re looking at will keep its value.

Ready to buy your new build home? We’re here to help.

Whether you’re buying a new build as a first-time buyer, or are browsing new homes to take your next step on the property ladder, sorting your mortgage is one part that doesn’t need to be stressful. We’ll do the heavy lifting of sorting through the deals and filling out the paperwork to help you secure a mortgage that suits your circumstances.