New Build Conveyancing Solicitors
In this article, Conveyancing Assistant Eloise Bishop answers some frequently asked questions about the new build conveyancing process.
Purchasing a new build home is a very exciting process but it can also be complex depending on the size and nature of the development.
Please contact our team of conveyancing solicitors on 01707 329333 or email firstname.lastname@example.org. You can also generate a no-obligation online conveyancing fee estimate here.
What is a new build house?
A new build house is a recently constructed or renovated property that has not been occupied before.
Do you need a solicitor to buy a new build house?
In summary, yes. You certainly do need a solicitor to purchase a new build property.
A common misconception is that new build conveyancing is an easier process because the property is brand new. However, there are significant other factors to consider.
A Conveyancing Solicitor must go through a large volume of documentation to ensure that the build is compliant with any restriction or rights imposed on the Developer’s ownership of the land.
Where there is a huge development, invariably the documents will increase. As a result, a considerable amount of time needs to be taken to check these.
Some well-known Developers have a standard pack they issue for their site. This includes an information sheet, which should deal with the important matters that a Buyer will need to consider.
Important matters for consideration include:
- compliance with planning permission
- obligations in planning agreements
- how the roads are going to be looked after
- how the property is connected for drainage.
A conveyancing solicitor can ensure these potential issues are dealt with properly, to avoid additional costs in the future.
The new build conveyancing process often involves having to work on tight timescales. The process can sometimes be made stressful by developers who are keen to exchange and complete in a short time frame. An experienced new build conveyancer can help minimise this stress by ensuring the transaction runs smoothly.
Whilst it can seem tempting to do your own conveyancing, we strongly advise against this, especially for a new build property. You can read more about the dangers of DIY conveyancing here.
What is the role of a new build conveyancing solicitor?
Our role as Conveyancing Solicitors is to protect the client’s best interests.
For instance, we will investigate the legal title of the Developer and raise any relevant enquiries to ensure that you are fully informed about the property you are buying.
We will check that the developer will comply with the conditions in their planning permission, obtain details of the newbuild warranty for the property and who will issue the building regulations certificate for the property.
Furthermore, we will check any arrangements of the development. For example, who will be responsible for the roads and sewers.
We will also carry out searches against the property. These include local authority searches, Land Registry searches, water and drainage searches, and environmental searches. Searches have a lifespan of 6 months so it is important that completion of the new build property is within this period.
Once we have all the information, we will then report to you in detail. So, you can make an informed decision regarding your purchase.
What is the process of buying a new build home in the UK?
The process of buying a new build home is outlined below.
The first stage will be to reserve the new build house by paying a reservation fee. This will reserve the property for a period, usually around 28 days. Most developers expect exchange of contracts to take place within this period.
The reservation fee typically ranges from £500 to £1,000. This will usually be deducted from the final purchase price on completion. Please note that you will have to forfeit the reservation fee if you decide to pull out of the transaction.
Appoint a solicitor
At this stage you should instruct a conveyancing solicitor to assist you with the legal side of buying a new build home.
Your developer may recommend someone, but it is entirely your choice which conveyancing solicitor to instruct.
When deciding which solicitor to use, it will be worth opting for one that has a high level of experience in new build conveyancing, due to its complexity and high demands.
Please contact us or generate an estimate here if you are considering instructing us for your new build purchase.
Once all documentation has been finalised, we will arrange for you to sign the Contract and make the deposit. Once you are happy to proceed, we will exchange contracts with the developer’s solicitors. This means that you and the Seller are legally bound to the terms of the contract. We will always speak with you before exchange of contract takes place.
If the property is ready for occupation, a fixed date for completion will be agreed. On this date, the balance of the purchase price (less any deposit paid and the price of any additional items you agreed to pay for) is sent to the Developer’s Solicitors. On receipt of the monies, the site office will contact you to collect the keys to your new home.
If the property is not fully built yet, your completion date will be agreed in a slightly different way. As the developer cannot predict with certainty the precise date the property will be available for occupation, completion will be on notice. This means the developer will give notice to your Conveyancing Solicitor that the property is ready and confirm the date of completion. Usually, the site office will have also discussed this with you, so you are aware of the date. They normally provide at least 10 working days’ notice, depending on the terms of the contract for completion. This then allows all parties to prepare for the date and request balances and mortgage advances.
How long does it take to buy a new build house in the UK?
There are many different factors which can affect how long a transaction takes to go through. For example, how smoothly your mortgage application runs, efficiency in returning paperwork and the time it takes for search results to come back.
Generally, new build conveyancing takes between 6-12 weeks. However, this depends on the complexity of the transaction. We will always keep you updated about timescales.
The process of buying a new build house can sometimes be quicker than a sale of an existing property. For example, lengthy chains can cause delay, but in new build transactions there is no upward chain. There is also no need for time to be spent on negotiations as this would have been agreed when you complete the reservation form.
Is conveyancing for a new build more expensive?
We tailor our fees to the type of work carried out. As a result, for new build purchases, we charge a fee that covers the additional work encountered for developments. Our fees are competitive and reflect the quality of the service we provide, especially in view of the forever changing requirements of mortgage lenders.
Do I need a survey for a new build?
Whilst it is not compulsory to complete a survey on a new build house, it is always recommended. Even new build houses can have issues with them, often due to rushed construction or inferior building methods used. A survey will flag any potential problems with the house. If problems are identified, you may decide to negotiate a reduction in the purchase price to account for costs in rectifying the issues. The developer may offer to correct any maintenance issues prior to the sale.
What is new build snagging?
New build snagging is where a small defect or problem remains in your property after the building work has completed. A snag is usually something that has been damaged or broken such as a missing hinge on a door or kitchen fixtures which have not been fitted properly. Most snagging issues are cosmetic.
It is advisable to put together a snagging list once the property is completely finished. Here you can report any defects for the developer to rectify. You should arrange this with the site office directly.
New build for first time buyers
The Government arranged a Help to Buy Scheme to assist First Time Buyers onto the Property Ladder. If you applied for a Help to Buy Equity Loan by 6.00pm before 31 October 2022, your application will still be processed. However after this date, you can no longer apply.
What is new build shared ownership?
Shared ownership is one of several schemes available to help new buyers step onto the property ladder. Generally, it is where you purchase a share of the property and pay rent on the remaining share to the developer or housing association. Later, there should be an option to buy a bigger share in the property. These are known as Shared Ownership properties which are often leasehold. Shared ownership purchases are also quite complex and add another element to the purchase.
Buying a new build with a house to sell
If you are buying a new build house and have a property to sell, it is important to consider the potential difficulty of synchronising completion of both your sale and purchase.
Ideally, a buyer of a new build house should wait until the house is completed before exchanging contracts and agreeing a fixed completion date. Alternatively, the developer may be able to indicate when the property will be finished, making it possible to exchange on the dependent sale with a completion date set based on the developer’s prediction.
However, it is important to bear in mind the risk. If there is an exceptionally long delay in the completion of the new build house, there is the danger of having to complete on the sale and move into alternative accommodation. Unfortunately, the cost of this cannot be claimed as compensation from the developer.
Your new build conveyancing solicitor will keep you informed and help you to manage the process of buying a new build with a house to sell.
New build and council tax
Any property considered to be a dwelling in England, Wales and Scotland is subject to council tax. This includes new build houses. New build homeowners will be taxed in accordance with the size of their new build house, the value of the property and its location. Council tax can be legally charged from the date the property is occupied or from the date the new build house officially becomes a dwelling (as specified in the completion notice).
New build and estate charge
New build estate charges arise when a new housing estate or development is built, and the local authority decide not to adopt the new area. As a result, the costs of maintaining the estate would not be maintained by the public.
This is now becoming more and more common. Therefore, if any areas such as roads, communal areas or drainage are to remain private, it will be the responsibility of the owners, developer or third-party management company to pay for the upkeep. Lenders are quite specific on their requirements to these. Your conveyancing solicitor will check to ensure these requirements are met. Usually, a management charge is agreed. This is a nominal fee paid every year to facilitate this.
Therefore, before buying a new build house, it is important to get a valuation. This will make you aware of any potential fees you will be liable for as the new homeowner.
New build without NHBC
Statistically, most new build defects occur between 5 and 10 years after construction. Therefore, when buying a new build house, new home warranty and insurance cover from an independent third party is essential. It will be a condition of any mortgage offer.
The NHBC ‘Buildmark’ is the most commonly used scheme. When buying a new build house, the contract with the developer should include a term stating that the developer is registered with NHBC and that on exchange, the developer will enter into the 10-year home warranty and insurance scheme.
Without any form of warranty, the property will not offer sufficient security to the lender. So, it is unlikely to be mortgageable for a period of 10 years from the date of its completion. Consequently, if the builder cannot or refuses to provide NHBC cover, or a suitable alternative, you should seriously consider pulling out of the transaction.
New builds and stamp duty
Stamp Duty Land Tax (SDLT) is a tax due on all property purchases, new or pre-owned. Currently, the threshold where SDLT is applicable is £250,000. Different tax rates apply if you are a first-time buyer or if you are buying an additional property.
See gov.uk to find out more information on SDLT.
Your local new build conveyancing solicitors
We are solicitors specialising in conveyancing, including new build purchases. We are based in Welwyn Garden City, Hertfordshire but have experience in conveyancing matters across the country.
Furthemore, we are the only law firm in Welwyn Hatfield ranked for Real Estate in the Chambers & Partners UK Guide. This prestigious legal directory profiles the best solicitors in each region of the UK. We are very proud to be included.
We are also ranked number 1 for Housing and Property Solicitors in Welwyn Hatfield, on the Review Solicitors website. You can read all our reviews here.
These accolades position us as one of the best conveyancing solicitors in Welwyn Garden City.
Get in Touch
The Conveyancing Solicitors at Crane & Staples are experts in residential conveyancing and new build purchases. Please contact our Property Team on 01707 329 333 or email email@example.com for more information. We look forward to hearing from you.