THINKING OF BUYING A BRAND NEW HOME?Our customers tell us the main advantage of buying a brand new home is to be the first user of kitchens, bathrooms and bedrooms as well as appliances, fittings, cupboards, etc.
But what else is important?
1. Security, repairs and energy efficiency - brand new homes are often more secure, energy efficient and include a 10 year NHBC (National House Builders’ Certificate) or similar warranty so maintenance should be minimal for the first few years at least.
2. Eyes wide open –buyers need to satisfy themselves on price, specification, running costs, after-sale care, etc and, if leasehold, service charge and ground rent before committing. How many other units in the scheme have been sold – not just reserved - and what is the ratio of owner occupiers to investors or tenants? Social media can be a misleading source of information source so should be used as a guide only.
3. What you see is what you get - show unit, off-site marketing suite or even online ‘walk-throughs’ will give a better idea of quality and finish but a surveyor’s report is always recommended. Don’t forget to ask if kitchens, bathrooms, décor and fittings can be changed or customised.
4. Purchaser incentives –stamp duty, Help to Buy, part exchange, parking, appliances, etc., may be offered as incentives depending on market conditions - if not already included.
5. Simplified buying - a brand new, chain-free home can usually be secured more quickly and efficiently, without the fear of being gazumped.
6. Deposit - 10% of the purchase price is usually due on exchange of contracts - typically 28 days after reservation - irrespective of whether buying off-plan or if the property is ready for occupation. The balance is payable on completion when moving in is possible.
7. Investor influence -speculators and investors often purchase brand new homes ‘off-plan’ based on architects’ drawings and/or computer-generated images which may help developers complete the development. The flat or house might then be sold on at a higher price before completion -provided contracts are assignable.
8. Markets change - housing shortages, rising prices, availability of cheaper mortgages and government schemes may mean existing owners are just as likely as first timers or investors to buy off plan. Prices can fall if market conditions change but delays may allow extra time to save for a higher deposit and completion monies or even sell for profit if prices are rising.
9. Valid mortgage offers - mortgage offers for owner occupiers are usually valid for 3 to 6 months but an extension can be sought from lenders as delays in new developments are not uncommon. Updated bank statements, payslips and a further inspection may be requested to make sure the figures still add up for the lender.
10. Part exchange – if swapping properties, buyers don’t have to worry about the inconvenience of selling an existing home which could considerably reduce moving time, stress and possibly cost.
Jeremy Leaf & Co have successfully sold 100s of brand new homes, off-plan as well as completed, for over 30 years mainly in North London - asking our advice is a good place to start!
Jeremy Leaf, a former RICS residential chairman & independent North London Estate Agency owner