A Stamp Duty holiday was introduced by the chancellor in July 2020, then extended until 30 June 2021, in an attempt to boost the UK property market during the COVID-19 pandemic. This resulted in frenetic activity in the housing market, with high sales volumes of both pre-owned and new build homes being completed.

 House styles are very much a personal choice, with some preferring traditional and others favouring more modern styling in their choice of property, be it a detached house, terraced, townhouse or apartment. New build properties have a distinct allure for many buyers, as they can be customised with preferred fixtures and fittings and offer the prospect of a low-maintenance, energy-efficient house, generating lower energy bills.

Another attraction of a new build property is that, with no upward chain in a property sale and no worries over when existing owners will be able to move out, exchange and completion can be simplified. For first-time buyers, the government’s Help to Buy equity loan scheme, set to run to March 2023, is available exclusively for new builds.

Choosing a Developer

If contemplating a new build property, one of the most important considerations is that of the property developer. Housebuilders come in a variety of shapes and sizes, from the large national companies, who are almost household names and tend to build larger developments stretching to hundreds of new homes of various sizes, to the small, local builders who buy smaller plots of ground to build either single houses or small, compact developments. It is therefore important that any prospective buyer gets to know the developer in terms of the quality of the homes being built, their ability to deliver the homes in an agreed or proposed time frame and their after-sales care.

It is worthwhile researching the developer working on a site of interest and building up a picture of their past work. If the site is partially-completed and some homeowners have already moved in, speak to them. Did the developer meet the long-stop completion date? Was the snagging survey thorough? Did the developer act promptly and appropriately to address snags? Does the developer ensure ongoing construction is considerate of their residents? Are they happy with the quality of the property? Did it live up to their expectations? What (if anything) did they wish they’d known before they bought the property?

When doing research, it is important to remember that in general terms, local residents do not like developers or the houses they build. They are noisy, create dust and mud and their construction traffic is locally disruptive causing parking problems.

Where it isn’t possible to speak to residents with experience of buying properties on a site of interest, consider visiting the developer’s previous sites or researching these online. A quick internet search should throw up posts on internet forums from buyers with experience of a specific developer that they felt keen to share online. Of course, these views, as with those of residents you may speak to on site, should be taken with a pinch of salt, but a pattern of similar complaints can highlight potential issues you may well encounter with your chosen developer and allow you plan for this.

For example, one new-build buyer was aware of the ‘cheap and cheerful’ interior finish one developer was renowned for. He knew the buildings were structurally sound and he could be assured of a high-quality build, compared with other developers working in the area, but the fixtures and fittings were generally poor. Rather than let this deter him from buying, he negotiated with the developer to sell him the property without the kitchen, bathroom and carpets. In his view, he knew he’d have to replace the cheaper suites and flooring within a few years. So, he side-tracked the practical hassle of tearing these out a few years down the line, and spent extra on the high-quality interior he wanted. The same could also apply if you are keen on buying a new build but want to instil more character or personality into it: negotiate and perhaps you could pay less for a property that you can then add your own interior touches to before you move in. Alternatively, with a smaller developer, you could pay a little extra for the property and negotiate for the developer to incorporate some of your preferences into the build. You may want to change the kitchen units, up-spec the white goods, or request your preference of tiles in bathrooms. One new house buyer arranged for a narrow, full length window to be extended to form a useful set of French Doors. A good developer may be able to accommodate such changes. Many large housebuilders now offer their homes with a choice of fixtures and fittings packages of differing quality and price ranges, leaving the choice to the prospective buyer

Property Value and the ‘New Build Premium’

The benefits of a new build property come at a cost, often referred to as the ‘new build premium’: buyers can expect to pay more on a new build than a comparably sized and located ‘second hand’ house, the size of this ‘premium’ varies and is regionally dependent.  Although property prices generally increase year on year, if a buyer was to then sell their new build property quickly after purchasing it, there is a small risk that the increase in value may not match the premium paid for it as a new build. To mitigate against this, a buyer should ensure that a new build property suits their needs for the foreseeable future, so there will be no need to move in the short term.

Many new build houses are still sold as leaseholds, as are the majority of flats. The Title Deeds for both types of property include service charges for outdoor areas of the development, and potentially, a further ground rent charge, which the government is introducing legislation to reduce. Buyers must include these charges in their calculations.

It is worth noting that in many larger developments, property management companies are appointed to maintain common areas and landscaping of the site. Many of these provide minimal service for charges which they themselves set. On smaller developments, it is common for the developer to facilitate the formation of a residents management company, allowing the residents to either self-manage the site or, more commonly, appoint their own property management company.

Buying ‘Off-Plan’

One of the most unique features of buying a new build property, is that it  affords buyers the ability to customise their purchase with specific fixtures and fittings. When buying ‘off-plan’, you may be able to specific features of the design that wouldn’t otherwise be possible. It is even known for a developer to offer “shell” houses, where they will provide the design for the exterior of the property then allow the buyer to work with them to design the interior layout of their new home.

However, there are three major pitfalls to buying off-plan. Firstly, it can be difficult to visualise the final property when working from plans and the developer’s promotional materials. If there are no similar properties to view, it can be more difficult still to imagine living in the property and how this might be in reality.

Secondly, if you move in when the site is only partially complete, you may well be living in building site for months or years, depending on the size and progress of the development. If you work from home, have small children or wouldn’t get on well with dust and dirt in the streets surrounding your property, it is worth considering whether buying off-plan is really for you.

Lastly, the build may be subject to lengthy delays, which may mean any AIP (Agreement in Principle) held at the outset may be void by the time you come to complete. It is wise to agree a ‘long stop completion date’ with the developer if you are buying off-plan, so the delays do not unduly impact the conveyancing process, or cause you financial headaches.

Conveyancing

Some larger developers may offer their own solicitors for the conveyancing process, while individual buyers may choose to appoint their own. There is then the choice between a traditional family solicitor and a specialist conveyancing solicitor.

Limited expenditure in the first few years

Many developers offer built-in white goods and appliances in kitchens and utility rooms. These will invariably come with manufacturers warranties which will cover the cost of any repairs for the term of the warranty. Floorcoverings are often included and different levels of finish in fixtures and fittings are becoming more available.

New build properties are built with energy efficiency in mind, with double or even triple-glazed windows and good insulation throughout. With government legislation looking to ban the fitting of gas boilers in new properties from 2023, forward thinking developers are looking at heat pumps, which are both environmentally friendly and economical as a source of heating and hot water. All of these measures buyers can be assured of having a home that is more economical to run.

Warranty and Insurance

One of the most unique features of a new build property is the fact that the building itself, as well as fixtures and fittings, will most likely be under warranty for anywhere between two to ten years, so a buyer can be assured they won’t have to spend on any major structural issues in their property for the foreseeable future. However, most new home warranties will not cover the finish and quality of workmanship, so it is worth ensuring the snagging survey is thorough enough to highlight any aspects of the property that need to be made good.

If you are thinking of buying or selling your home, you may find some of these services useful: