Tips for buyers in the new build market

Understand your legal rights as a buyer

As a buyer, you have certain legal protections when purchasing a new build property. These include:

• Consumer code for home builders
  Most developers are required to adhere to the Consumer Code for Home Builders or New Homes Quality Code, both of which set standards for fair treatment, clear communication, and transparency. The codes ensure that you receive reliable information about the property, including its size, specification, and completion date, enabling you to make informed decisions. If a developer breaches the code it follows, you may have grounds to file a complaint or seek redress.
• Deposit protection
  When you pay a reservation fee or deposit, ensure it is protected. Many developers safeguard deposits under schemes such as the National House Building Council (NHBC) or similar warranties. 
• Warranty and guarantee
  New builds typically come with a warranty, such as the NHBC Buildmark or Premier Guarantee which covers structural defects for up to 10 years. Familiarise yourself with the warranty terms and ensure you understand what is covered and what isn’t.

Common issues in the new build market

While new builds have many advantages, they are not without challenges. Some common issues buyers may face are:

• Delays in completion
  New builds are often sold off-plan, meaning construction may not be finished when you agree to purchase. Delays can occur due to unforeseen circumstances. Ensure the contract includes a ‘long stop date,’ which sets a deadline for completion and provides you with remedies if the developer fails to meet it.
• Snagging problems
  Even brand-new properties can have defects, known as ‘snags.’ These can range from minor cosmetic issues to more serious problems like faulty plumbing or poor insulation. Conduct a thorough snagging inspection before moving in, ideally with the help of a professional snagging surveyor, and report any issues to the developer promptly.

Steps to protect yourself

Taking proactive steps can help you avoid potential pitfalls and ensure a smoother buying process:

• Instruct a specialist solicitor
  Buying a new build involves unique legal considerations, so it’s crucial to work with a solicitor experienced in new build conveyancing. They will review the contract thoroughly, advise on key clauses (such as completion dates and deposit protection), and ensure your interests are safeguarded.
• Research the developer
  Investigate the developer’s reputation before committing to a purchase. Check reviews, visit completed developments, and verify their adherence to the Consumer Code for Home Builders. A reputable developer is more likely to deliver on promises and address any issues efficiently.
• Read the contract carefully
  New build contracts can be lengthy and complex, but it’s essential to understand the terms before signing. Pay close attention to clauses regarding completion dates, deposit protection, and warranties. Your solicitor can explain any unclear terms and negotiate amendments if necessary.
• Conduct a snagging inspection
  Once the property is completed, inspect it thoroughly for defects. Create a snagging list and provide it to the developer, requesting that all issues be rectified before completion. This step ensures your new home meets the promised standards.
• Understand the costs
  Beyond the purchase price, there may be additional costs associated with buying a new build, such as stamp duty, mortgage arrangement fees, and service or maintenance charges. Budget for these expenses to avoid surprises.

Buying a new build property can be a rewarding experience, but it requires careful planning and attention to detail. By understanding your legal rights, being aware of common issues, and taking proactive steps to protect yourself, you can navigate the process with confidence and avoid costly mistakes. Working with an experienced solicitor is key to ensuring the transaction runs smoothly and your interests are safeguarded.

Purchasing a home is one of the most significant investments you will make. Taking the time to prepare and seek expert advice will help ensure your new build purchase is a positive and successful experience.

If you have any questions or would like further advice in relation to the issues covered in this article, please contact Claire Maker, Senior Associate in our Residential Conveyancing team.