Due to an increasing population and people living longer than ever, the need for new homes has never been greater. The good news is there is momentum in the new build property market, supercharged by government and lender initiatives.
This guide will cover the fundamentals of buying a new build property and new build mortgages, focusing on the benefits, what to expect and the processes involved.
“They don’t build houses like they used to”
You’ve probably heard this said before, often after a rare instance where a new build property has a defect caused by the builder. Yet, new build properties can often outshine the workmanship and functionality of older and established properties, especially when built by industry-leading firms.
One benefit of choosing a new build property is that it includes modern features that integrate with modern lifestyles. This offers instant appeal to the buyer and helps maintain the property’s value if it is ever re-listed for sale. Furthermore, new build properties are usually made with the latest building techniques and environmentally conscious building materials, which make them more energy-efficient and cheaper to run. With a new build home, you won’t just be saving on your energy bills either. These properties can be more affordable to maintain compared to older properties due to the materials and parts used, which may be more widely available.
Last but not least, if you buy a new build home in the UK, the building and workmanship are covered by a combined 10-year warranty, which you won’t get if you buy an older property. The first two years after completion are covered by a developer liability period, whereby the developer is responsible for any issues that may arise. For example, if you bought a new build and noticed a faulty pipe or window, the developer is obligated to return and fix the issue. New builds then have a further eight-year warranty, whereby the builder is responsible for fixing structural and foundation problems.
While every individual mortgage journey is unique, there are some generalised expectations and tips when buying a home still under construction. Here are our top tips based on our extensive experience with the new build mortgage market:
There are typically six steps in buying a new build home. The process is somewhat different to purchasing an older home and includes:
Choosing a reputable developer from the outset is important for your peace of mind in ensuring that you’ll own a high-quality property at the end of the process, but it’s also important in respect of your mortgage. You’re more likely to secure a preferable new build mortgage deal if the lender recognises your developer as a reliable and experienced builder.
One part of the process which is different from a standard buying process is the need to reserve your property. This is a type of deposit paid to the developer to reserve the property you want to buy, formally known as a reservation fee.
If you decide to tailor your new build to your specific preference, ensure these customisations are listed within your reservation agreement with the developer.
Interest rates can sometimes be lower on new build properties. This is due to lenders providing innovative schemes to reward purchasers looking to buy energy efficient new homes.
The whole process can be made less daunting and smoother by engaging the services of a new build mortgage specialist. Contact our team today to discuss our new build mortgage services and how we can assist you.