Are you a first-time buyer looking to buy a new-build home? Here is our checklist for first-time buyers with the things to consider when choosing a house.
Buying a new-build home is probably the biggest decision you are going to make, so getting it right is important. New build homes are a great option for first-time buyers, they offer the benefit of coming with guarantees, lower running costs etc.
Buying a new-build home checklist
Once you have decided that a new build home is for you, the process of finding the right house starts. In this article, we will give you our top 8 tips for first-time buyers who want to buy a new-build property. Here’s our ultimate buying a new house checklist:
1. Don’t rush into a decision
When buying a new-build home, take your time. No one is rushing you. You don’t need to buy the first house you see. Make sure the house is right for you. Are there enough rooms? Are they the right size for your needs? Are there enough bedrooms? The list of things to consider is endless. Don’t be afraid to ask a ton of questions about the property. Here is a list from Underfloor Heating Trade Supplies of 50 questions to ask during a property viewing.
2. Choose the right location
When buying a new-build home you will probably find that there are several builders in the area looking to attract buyers. Take your time and do your homework, visit the site, get to know the developer and area during different times of the day. This will give you a feel of what the estate and area is like.
The geography of the property will dictate some of the things that you should consider when making a decision. What is the elevation of the development? Is the development on a flood plain? Is the property situated in a position that leaves it exposed to weather? Which way is the property facing?
If people have moved into the development, knock on a door, ask them how they like their house, the builder and the area. Once you have moved in it is too late to change your mind so the more research you do in the early stages the better. Making the effort early on will pay dividends in the end.
3. Understand new-build mortgages
For first time buyers, getting a mortgage is going to be your biggest outlay. Typically, you will need 10% of the property value for the deposit. However, small differences can have huge impacts on how much you have to borrow. If you don’t have 10% there are government schemes available such as the Help To Buy scheme. For people with 5% deposit, the government will lend you 20% of the new built homes value, but this comes at a premium.
The more of a deposit you have the less you will have to borrow. 10%-15% of the total property value will help you to get better rates. For the best rates, you need a 25% or above deposit. The Help to Buy scheme is not the only option. There are others such as a Lifetime ISA, Help to Buy ISA and Shared Ownership.
Learn more about new build mortgages for first-time buyers here.
4. Be wary of extra items
One of the best things about buying a new-build property is that, sometimes, many of the fixtures and fittings are included in the price. Developers may try to sell you extra items within the cost of the property. The price of these items is normally inflated. They will probably be cheaper if you buy them separately.
Exactly what’s included varies depending on the developer and what they are offering. Your developer may (but not always) offer to pay your legal fees, stamp duty or even a cashback option. Please be aware that any lender will take into account any of the builders’ incentives, if they exceed 5% of the value of the property, they could impact your mortgage rates.
5. Learn about new-build warranties
It is important to understand warranties for new-build homes. Warranty providers are organisations that oversee the build process of your new house. They carry out inspections to ensure your builder is constructing your new home to the standards they require.
Once you have taken legal completion of your new home, your builder will give advice on what happens after you have moved in. Warranty providers will detail what is included within your warranty, the process your new home will go through and what to expect from a new home. This will include detailing what a defect is and how you report these defects to your builder or warranty provider.
Some of the biggest new-build warranty providers in the UK include:
6. Decide on leasehold or freehold
New-build properties can either have a ‘leasehold’ or ‘freehold’ status. Read our blog post to learn about the difference between freehold vs leasehold properties.
How do I know if a new-build is freehold or leasehold?
Your new home builder should tell you if the property you are interested in buying is freehold or leasehold. If this information is not forthcoming, then make sure you ask them this important question. It is legally required that all properties for sale state if the tenure is freehold or leasehold.
Whilst leaseholds were once most common in flats, there has been an increasing amount of new build houses with leasehold attached. Owning a leasehold property typically involves paying a ground rent to the freeholder. In many cases, the freeholder is the development company that built the property.
Be careful if you are buying a lease-hold new build. If this is you, it’s important to check that your lease doesn’t include a ground-rent-doubling clause.
7. Familiarise yourself with the process
When you have decided which developer you want, the buying process may look a little like this:
This is the first meeting after you have reserved your new home.
On reserving your new built home you will be invited to a welcome meeting with your sales negotiator.
Meeting to choose colours /extras
The next meeting that you will have is when you choose your colour choices and any extras that you may want.
Your sales advisor will start to contact you weekly with updates on your new home and she or he will be asking you how you are progressing with your mortgage and searches with your solicitor.
Once you have exchanged contracts your sales advisor will keep you updated as to the progress of your new home and any other issues that may arise.
Following CML, invite to carry out demo
When your new built home has been passed by the warranty provider and issued a CML certificate, you will be invited for a demonstration meeting with the site manager. Sometimes your sales advisor may also attend.
Once monies have been exchanged you will be given a key. The house is now yours.
7 day follow up
Your site manager or sales advisor will make an appointment to visit you around 7 days after you have received your keys. This is to make sure you are happy and that everything is working within your new home.
8. Get a professional snag list
If you are thinking about buying a new-build home our advice would be to have your property professionally inspected for defects by a company you can trust. Lively professional Services Ltd are an established new build professional snagging company offering one of the most comprehensive surveys available for newly-built homes.
We use specialist equipment enabling us to check for defects that are out of sight, documenting them in photographic reports. We endeavour to issue these snagging reports on the same day.