What to Look for When Buying a New-Build Home

Purchasing a new-build home can be an attractive proposition for buyers looking to make a fresh start. However, it is important to remember that buying this type of property brings unique legal considerations that need to be taken into account. 

As experts in the field of conveyancing and property law, we have compiled this helpful guide on the key questions you should be thinking about when buying a new-build home, and the additional steps you may need to take to ensure you are legally protected. 

Read on for more information on how this process works. If you’d like to speak to a member of our team about any aspect of the conveyancing process, visit our dedicated conveyancing page, or call us on 0800 083 0815. 

Does the property have an NHBC warranty or any other guarantee?

Most new homes are protected by a ten-year Buildmark warranty and insurance, provided by the National House Building Council (NHBC). However, some builders will use other warranty providers, and the terms of this cover may differ from the NHBC model. 

As such, it is vital to work with your solicitor to ensure that a suitable warranty is available on completion, and to make sure you understand the purpose and effect of the cover. 

Did the builders of the property use an incentive scheme?

Many builders of new housing make use of incentive schemes that allow them to sell a property at a discounted price. This is worth bearing in mind, because in many instances the amount that is discounted remains owed to the builder, and it will be necessary for the buyer to enter into a legal charge agreement - similar to a mortgage - that is registered against the title. 

Your solicitor should advise you on the terms of this charge, and help you clarify the details of when and how it will be repaid to the builder.

How does buying a new-build affect the mortgage process?

If you are using a mortgage to finance the purchase of a new-build property, it will have to be issued at the outset of the transaction. However, many new-builds may not be complete for many months, and in some instances, your mortgage will have expired before completion. It is the responsibility of your solicitor to monitor the situation and liaise with your lender accordingly. 

It is also essential to provide the lender with the exact details of any incentives or discounts you are receiving at the application stage. Once the mortgage is issued, a copy will be sent to your solicitor, who will have to check that all the information in the offer is correct, and disclose any discrepancies to the Lender. 

If you have failed to disclose the incentive or discount, this can affect the offer, resulting in:

• delays to the purchasing process, as a new amended offer is considered by your lender, or;
• the potential revocation of your offer, meaning the mortgage will no longer be available to you. 

Is the site clean and properly checked for contamination?

Vetting and surveying the land when purchasing a property is always an essential process,but it is particularly imperative that care and attention is given to search results when it comes to new-build properties. 

Many builders will buy land that has been contaminated at a cheap price and then clean up the land before building on it. If the land turns out to still be contaminated, the cleanup cost can escalate to thousands of pounds. As such, you should work with your solicitor to ensure the land is completely contamination-free, and that these risks have been investigated thoroughly, before proceeding with the purchase. 

Is the property connected to the main drains and sewers?

It is unlikely that drains and sewers will exist under new-build land, making it the responsibility of the builder to ensure the correct and proper drainage and sewer systems are put in place. 

As part of this, the builder will need to sign an agreement with the local authority that once the installation of the drains and sewers is complete, the council will take over control and maintenance of this infrastructure. Your solicitor will need to check that this agreement is in place, and ensure the terms of the contract are satisfactory.