Buying a new-build property before construction has started or while it is being built (known as buying ‘off-plan’) can allow you to get a pristine home or investment opportunity at a significant discount compared to buying a finished property. If you are involved from an early stage it can also mean that you can have significant input into the look of your new home.
However, there are various issues that buyers need to be aware of when buying off-plan to make sure you avoid being caught out by unexpected delays or problems with the finished property.
How completion dates for new build property work
When buying a property off-plan, it is important to understand that the exact date of completion can vary, depending on how the development progresses. If there are any unexpected delays in the construction schedule, this is likely to impact the timescale for completion i.e. when you can actually take possession of the finished property.
With most new build properties, you will be given two potential completion dates. The first, known as the ‘short stop’ completion date is when the developers expect to have the property finished and ready for you to occupy. The second, known as the ‘long stop’ completion date, is the final date by which construction work must be finished.
Typically, you will be entitled to either forfeit the purchase or receive some form of compensation if the developer does not complete the property by the long stop completion date. However, this is not always the case where delays are outside of the developer’s control.
Once construction work s completed the developer will issue you with notice to complete and typically you will have 5-10 working days to complete from this notice being served.
Where you are purchasing with a mortgage this uncertainty about the completion date can sometimes mean that your original mortgage offer will expire. It is important to remember that whenever the transaction completes it is your responsibility to ensure your funding is in place. This may mean renewing a mortgage offer when it is coming up to expire.
Make sure to have a snagging survey
While you might expect a new-build home to be perfect once the developer declares it finished, in reality there can often be various minor and not so minor issues that need to be resolved. This can include everything from a door that doesn’t close property or a chipped worktop to more serious issues, such as a leaking roof or faulty plumbing.
Paying an experienced surveyor to carry out a snagging survey is an additional expense, but it is normally highly worthwhile as it is often quicker and easier to get issues fixed if they are identified while the construction team are still around, rather than waiting until later when they will have moved onto the next job.
Sometimes people do not think they need a survey as the property comes with a new build warranty. However, these warranties will not usually cover these snagging issue. It is usually a good idea to have the snagging survey carried out around two weeks before the agreed completion date to ensure any issues can be resolved before you take possession of the property.
Understand your warranty
New-build homes will typically come with some form of warranty, intended to provide peace of mind that any issues you discover with the property will be resolved without costing you extra.
However, it is important to understand that many of these warranties come with small print that can sometimes mean the warranty provider is able to avoid paying for the cost of remedial work needed to fix an issue with the property. It is therefore recommended to have your solicitor carefully check the details of the warranty so you are absolutely clear what is covered and under what circumstances you will and won’t be able to claim.
To find out more about our conveyancing services for new-build property, call us today on 01476 372 036 or use our contact page to find details of your nearest office.