New build homes checklist: 6 essential things to do before you buy

New build homes checklist: 6 essential things to do before you buy

You may be tempted to buy a new build home, but beware of the setbacks. Paula Higgins of the Homeowners Alliance reveals what you should be wary of.

loveMONEY Expert Panel

Mortgages and Home

loveMONEY Expert Panel
Updated on 8 August 2017

The lure of a new home

There are plenty of benefits to buying a new build property. You’ll be the first person to live in it, which can be a big draw for some buyers, and if you buy early enough you’re usually able to choose your own fixtures and finishes.

 However, before you get bowled over by a show house and sign on the dotted line, it’s worth bearing in mind that new builds are not without their problems. 

Research developers

If you were searching for a plumber to undertake some pipe work or a builder to extend your kitchen, chances are you’d shop around and do your research before agreeing to anything. Yet when it comes to developers who are responsible for building the most expensive thing you’re ever likely to buy, far fewer people do the necessary due diligence.

Make sure you research the developer, visit its other sites and if the site is partially complete then talk to residents who have already moved in.

Never rely on the marketing spiel and promotional material.

Haggle on the price!

While buyers will think nothing of trying their luck with a below asking price offer when buying an older house, with new builds most buyers agree to the developer’s price without even attempting to negotiate.

Compare the new build home you are looking at with similar “old” properties in terms of value, space and rental value in the local area and negotiate with the developers. Find out what other properties on the site have been sold for and don’t be afraid to offer less than asking price, especially if the development is almost complete.

If you can’t get a discount on the price see what additional extras can be thrown in. Some developers, for example, will agree to pay your Stamp Duty.

Plan for delays

Your developer will give you a date when the property will be complete. Take this with a massive pinch of salt. Delays can and do happen in any construction and it’s important to be prepared for them. It’s always a good idea to get the builder to agree a ‘long stop’ completion date which means he’ll be liable to pay you compensation if he doesn’t finish the work by that date.

And if a property is incomplete, do not move in! Once you’ve been handed the keys you’re going to struggle to get the builders to finish the job. Even if it’s only a few small jobs that are incomplete, don’t move in until they’re seen to. 


Check the tenure

Earlier this month, the Government announced plans to ban the sale of new build houses under leasehold. These proposals are now subject to an eight-week consultation but as things stand at the moment it’s still possible to buy new build houses as leasehold.

What’s more, unless you make a point of asking about the tenure of the property you could find yourself with a leasehold house without knowing. That means not only will you need to pay to buy the freehold, you can find yourself liable for other charges, such as permission to alter your home.

According to the Homeowners Alliance Homes Held Hostage report, less than half of adverts on popular property websites are clear as to the correct tenure of a property.

Developers and estate management companies rely on leasehold to confuse buyers, charge exorbitant administration fees and ever-increasing ground rents that render properties unsellable.  You can find out more about the reality of living in a leasehold house on the HomeOwners Alliance website

Get a snagging survey

In no other industry is it acceptable for you to have to buy an item before you’re given the chance to look at it and check it’s up to standard. Yet in the new build world this is exactly what happens.

The Homeowners Alliance is currently calling on developers to allow their customers to inspect their property before completion. Sadly, they are not required to do so.

Tell your developer you want to view the property and you want to be accompanied by a professional snagging inspector before you complete and make sure this is detailed in the contract. And make it clear you want adequate time to do this, not a rushed twenty minutes on the day of exchange as some of our members have experienced.

However, be careful that developers don’t use this against you and make it clear that any problems that occur as a result of unfinished or shoddy workmanship that are not picked up on during inspection must still be rectified.

It’s also worth doing a post-snagging survey at the end of the two years, when responsibility for putting things right goes from the developer to the warranty provider – usually the National House Building Council. 

Understand your warranty

When you buy a new build property it will come with a warranty from one of a number of warranty providers. This will provide cover for your property for a period of time, usually ten years. However, what’s covered during that time is the source of much confusion.

According to the latest Homeowners Alliance Survey half of all new build buyers wrongly thought their warranty covered snagging issues.The warranty is actually split into two periods – the defects insurance period, which covers the first two years, and the structural insurance period which covers years three to 10.

During your first two years in the home, the builder is obligated to fix any issues with the work they have done such as faulty pipes or poorly fitted windows. During the structural insurance period, the builder is only responsible for major problems with the structure of the house. 

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