BUYING A NEW BUILD PROPERTY – ESSENTIAL INFORMATION

Buying a new build property looks a little different from the usual house buying experience. Whilst the fundamentals of the process remain the same, there are some key distinctions and a lot of terminology you might not be familiar with.

This article looks are some of the frequently asked questions about new build properties.  

What is a new build warranty?

A new build warranty is an insurance policy for new homes. The period of the warranty is usually ten years from when the policy document is issued (which will usually be just before completion of the house purchase).  It provides cover for any structural defects identified after completion. It does not cover usual wear and tear or cosmetic issues.

There are a number of warranty providers – the most common one is NHBC.

You will be given a copy of the new build warranty by your conveyancer on completion. It’s important you keep this in a safe place should you need to make a claim. You will also need to provide this to the next owner of the property if you sell it within the warranty period.   

What is ‘snagging’?

Snagging is a process done before completion – this involves a walkthrough of the new property to identify ‘snags’ which are defects in the property. Snags are, for example, plumbing issues or unsatisfactory installations in the property, but can also be smaller, cosmetic issues such as cracked tiles or painting imperfections.  You will not be able to delay completion for any minor ‘snags’. However, a full list should be submitted to the builder and a timeframe for when the snags will be addressed following completion will be provided.

What does it mean when exchange of contract is ‘on notice’?

With new build properties, you will often exchange contracts before construction is finished. You therefore exchange ‘on notice’. This means that there is no fixed completion date yet. When the property is ready to complete, your conveyancer will be served with written notice by the Seller’s solicitor. The notice then requires you to complete the purchase within ten working days.  Notice will only be served when the property is ‘build complete’ – this means that it’s ready to be lived in and all checks by the warranty provider and building control have been carried out and signed off. The contract will contain a ‘long stop date’ which is usually six or twelve months from the date of exchange. If the property is not ready by the long stop date, you can withdraw from the purchase.

Will there be any additional costs?

Most new build contracts include a document or engrossment fee – this is a small fee payable to the Seller’s solicitor on completion to cover their costs in preparing the Transfer, Contract and any plans. This is usually around £100-200

If you are required to pay a ground rent and/or service charge, you will also be asked to pay an apportioned contribution on completion.

However, any reservation fee you paid to reserve your plot at the outset is deducted from the balance due to complete.

If you are buying a new build property, please get in touch with our helpful and experienced Conveyancing Specialists on 01606 74301 for a quote.