You could be forgiven for thinking twice about buying a new-build home, as in recent months they have had plenty of bad press.
There have been widespread complaints about developers selling new-build houses leasehold, rather than freehold. This has led to a government consultation about banning new-build houses that are leasehold in future developments, as well as limiting the amount homeowners will pay in ground rent.
However, the government’s Help to Buy equity loan scheme still offers first-time buyers in England and Wales the best chance of getting a foothold on the property ladder. Available to home movers too, it offers up to 20% off the cost of a new-build home with a purchase price of up to £600,000 in England (£300,000 in Wales), with just a 5% deposit; the loan is interest-free for the first five years.
There have been reports that the Help to Buy Equity Loan scheme will end soon. However, the government has confirmed that it will continue until at least 2021 and has recently announced that it will invest a further £10 billion into the scheme so, if you are considering buying a new-build home with government help, start thinking about it now.
A brand-new home will also be energy-efficient according to the House Builders Federation, new homes in the UK are around 50% cheaper to run than the equivalent Victorian house. This could result in an annual saving of £440 for a one-bedroom ground-floor flat and £1,410 for a four-bedroom detached house.
However, there are pitfalls to avoid which can range from buying early and spending months living on a building site to snagging problems once you have moved in.
Here is a few tips on to how to pick the right development and secure a top deal.
Pick the right developer
An easy way to find all the new developments available in your chosen area is to visit property portal Zoopla, key in your chosen postcode and search for new homes within a few miles radius.
To narrow it down further and find out more about how consumers rate some of the UK’s major house builders, it is worth reading the House Builders Federation’s annual customer satisfaction survey, which you can find on its website at Hbf.co.uk.
More than 52,000 home buyers completed its latest survey, which covers the 12 months from October 2015 to September 2016. House builders are given a star rating and you can see how many people have voted for them.
About 15 house builders are five-star rated, including household names such as Barratt Developments, Bellway Homes and McCarthy & Stone. But it is worth noting that some well-known developers did not perform so well for example, Bovis Homes only received two stars.
Carefully time your purchase
Developers can be more willing to negotiate as they approach their financial end of year or half year when their results will be published to shareholders, and managers will be keen to meet their targets and enjoy big bonuses.
To find out half-year and end-of-year dates for the main house builders, visit the advice site Brand-newhomes.co.uk.
Other good times to negotiate are at the start of the development when builders are keen to make that first sale and when there are just a handful of properties left and the builder is keen to move on to his next scheme.
The downside, buying at the early stages of a development may mean that you find yourself living in a building site for many years, and the constant completion of building phases will make it very difficult to sell, should you wish to.
Check the small print
The bitter complaints from some homeowners of new-builds about unfair terms that developers can impose highlights the importance of reading the small print and of employing a good lawyer or conveyancer who will be acting in your favour and not the developers
Your mortgage provider will want to see evidence that the new-build property has been granted a warranty that offers protection should defects be discovered within 10 years of completion as well as ensuring that the builder has complied with building regulations.
Warranties, such as the NHBC Buildmark scheme, cover two specific periods. The first two years will cover minor defects as well as structural issues, while the last eight years will only cover major issues with the structure of the building.
As the government is consulting about banning leaseholds for new-build houses, you may want to think twice about this type of tenure, and also look carefully into whether ground rent charges will escalate over any leasehold period.
Spot snagging issues
You will want to make sure you do not discover that your new home is littered with snags or defects once the builders have gone. While you are likely to find some problems once you have moved in, ironing out as many as possible before exchanging or completing contracts will make life less stressful.
Given that some defects such as cracks or leaks may not appear for several months, it shows the importance of having an agreement in place for the developer to fix these defects as soon as possible.
Aim to arrange for a snagging survey to be carried out before completion, even though, under the terms of your warranty, cosmetic defects will be covered in the first two years after your completion date.