New build houses are where the home you are purchasing is brand new. Be aware that some are kleasehold and can contain heavy servcie charges.
The Advantages of New
A newly constructed home may actually depreciate in value the moment you turn the key from the door. In a static market you might lose money if you sell within a couple of years. Be careful about any house which is leasehold – why is the builder retaining the freehold. There are many recent cases where a freehold has been retained, only to be sold to a third party who then profits by increasing the ground rent which attaches to the leasehold.
A larger builder will generally complete on time. With a smaller builder consider agreeing a ‘long stop’ end date so he will be responsible to pay you compensation if he does not complete the job by that date.
You need to consider if you can add value. When purchasing consider if there’s scope to add value from the outset — a conservatory on the rear, or even a landscaped backyard or attic conversion. You might not be able to afford it today, but it might be an option later on.
- Be sure that you’re happy at each stage of the construction with how your new residence is shaping up but particularly before you complete. It is easier to point out what you want as the build is in motion rather than waiting until the end where it cannot easily be fixed. We’d urge you never rely only on the builders promotional material.
- Get a sense for what you are purchasing by going to the website and the area. Look at transportation links, do your trip to work, walk to the shops, schools, bars,restaurants and so forth.
- A new build should be covered by a NHBC guarantee which lasts 10 years. The coverage is attached to the home, so it covers successive owners throughout the 10 year interval. Note that NHBC is a insurance company. If you submit a claim, then NHBC may utilize the small print to prevent paying or carrying out remedial work.
- When it comes to the builder, check their reputation for the quality of their build. There are plenty of reviews from other buyers – don’t ignore them.
- Compare the new build house you’re looking at with comparable “older” possessions concerning value, area and lease value in the local region. Examine the purchase price per square foot, and examine it with all the resale marketplace so that you realize the degree of the premium you’ll be paying.
Buyers can frequently select fittings and fixtures to tailor the house to their preferences.
Check your contract for snagging provisions. Any new house will require fixes, hopefully minor, which you will be able to report and have corrected after completion. Check that any snagging provisions don’t have unacceptable exclusion, for example, like doorways catching on rugs straight with the builder.
Get to know the builders in the region in which you would like to purchase and explore them online. Watch out for where they’re reviewed on forums and feedback sites check what people are saying.
Covenants and Warranties
New builds may have covenants which govern your use of the house. Make sure you are aware of them.
Leaseholders are liable for paying for upkeep, buildings insurance, and an yearly ground rent. Although ground rent might be minimal, it may grow quickly (doubling every 10 years). This could make your house unsaleable.
As well as the NHBC cover, you may benefit from other warranties on for example white goods. Make sure you get these from the builder.