12th Mar 2020

What to look out for when buying a new build

For many, a new build property can often be an attractive option for your next home. Alongside it being fresh and modern, with no work to be done, there are often other incentives on offer - be it free carpets or the deposit being paid. Here, we look at some common considerations.

Shared ownership

This type of ownership can offer a boost for some buyers looking to get onto the housing ladder. Shared Ownership allows you to purchase a percentage of a property, and then pay rent on the remainder. The opportunity to purchase the remaining percentage is usually available, and this is known as “Staircasing”. In most instances, Stamp Duty can be paid in full, on the full purchase price, allowing first time buyer relief to be utilised on the property as a whole, rather than just the percentage initially being purchased.

Reservation fees

Once you’ve made the decision to buy and settled on the appropriate ownership model, you will usually be asked for a reservation fee to secure your new home. The amount can vary, but the fee is usually non-refundable, should you decide to pull out of the transaction. As such, it’s important to get legal advice which is independent of the developer to ensure you know what you are signing up for and your interests are considered first and foremost.

Completion on notice

Completion– the point in the transaction where you get the keys to your new home – is usually done ‘on notice’ for new build properties. This means that there can be a matter of a few weeks or even months between exchange of contracts (when the contract becomes legally binding and you are committed to purchasing the property) and your moving in date. This is all dependent on how soon the property is considered build-complete and habitable by the National House-Building Council (NHBC) or similar newbuild warranty providers, who ultimately sign-off the property.

There are a number of unique steps when it comes to buying a new build property and advice on the specific details is essential. Berwins’ new build team is able to answer any queries you may have when purchasing.

Khal Shahjahan is a solicitor in Berwins’ industry accredited property team and has almost 20 years’ legal experience.

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