What to Know Before Purchasing a New Build?
What is a New Build?
New Builds are exactly as they sound: new homes that are built to supply the ever-increasing demand for housing. However, there is more to New Builds than meet the eye. A property lawyer who provides Conveyancing services will admit to its complexity. Unlike with older properties that tend to have Legal paper trails that can validate its own legal existence, New Builds must start from scratch. Therefore, New Builds can carry as many risks to the buyer as benefits.
For the new home buyer, New Builds carry several benefits not available with older homes — besides modern fittings, appliances, architecture and improved energy efficiency. As most New Builds are not part of any chain, you can expect the transaction to be free of issues that may arise with chains. Further, where private sellers can leave you high and dry by later accepting an offer higher than yours, developers will usually lock themselves in (for a small fee/deposit) as soon as they accept your offer. In this regard, New Builds are an easier Purchase and carries low risk of falling through. The developer’s lawyers will usually have the legal pack ready with all searches on hand. This can significantly reduce the conveyancing time by weeks, if not months.
As with most residential purchases, there are incentives available for purchasing New Builds. The most important of these is a 10-year home warranty cover offered on new properties. The warranty cover acts as guarantee against any structural defects within the first 10 years. You can rest easy knowing that the home warranty will protect you against any losses due to the developer’s poor workmanship. Your conveyancer should check any home warranty and advice you accordingly.
Nothing New: New Build’s faults
Experts who follow the property market will confess to a glaring issue with New Builds. They are expensive —and understandably so! There is an allure to being able to design your own home, be the first person to ever own it, and to have it look and feel contemporary. The price difference is referred to as the New Build Premium. A study of housing prices shows that the average New Build fetches for 29% more than an existing property. The disparity is found to be even higher in certain markets and can be attributed to demand and supply, with recent events affecting the supply of building materials. However, many are not aware of the legal pitfalls that can come with the purchase of a New Build.
Why New Builds Need More Due Diligence
The Home Owner’s Alliance summarizes the potential legal troubles with purchasing New Builds as follows:
‘The legal side of buying a new build is more complex…because the potential for something to go wrong is much higher with a new build purchase’
The troubles that could come up can vary from issues with planning regulations, incomplete agreements due to developer negligence, improper road and sewer planning, failure to account for future maintenance of shared areas in the development, and so on. The list can keep going as the issues can be numerous if proper conveyancing is not carried out. A conveyancer acting on a New Build purchase may on average not just review 100s of pages of documents but 1000s of pages! It is crucial that the conveyancer carry out their duties diligently as failure can cost a potential buyer tens of thousands of pounds in losses. Worse yet, in some cases the buyer can be left with a property that cannot be resold on the open market. The legal documents on a New Build are usually complicated and not straightforward. As a result, the conveyancer dealing with a New Build case must have the appropriate level of expertise.
This is why most good law firms that provide conveyancing quotes charge higher fees for dealing with New Builds. The fact is, there must be more due diligence conducted on New Build transactions in order to be safe with your purchase. The last thing you would want is to find yourself in a legal trap because your conveyancer did not do their job right. A complete review of all the documentation leaves you in the best position to either re-negotiate the purchase price or to avoid purchasing a property fraught with legal issues altogether.
New Builds: Good Buy or Terrible Investment?
New Builds absolutely have an aesthetic allure that older homes cannot provide. Not to mention, they are how the market receives a steady supply of new housing to meet ever-growing demand. However, where you can definitely go wrong with a New Build purchase is with the conveyancing process. A smart conveyancer will ensure that the New Build is not only legally sound but that the terms are in your favour, along with protecting your deposit and bringing to your attention any potential pitfalls. You can find expert conveyancing lawyers for all your offline and online conveyancing needs with Phew!
The post What to Know Before Purchasing a New Build? appeared first on Phew!.
