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Buying a new build – Understanding potential pitfalls

Buying a home is always an exciting time for individuals, couples or families – but it can also be stressful.

This is particularly true for those buying a new build property.

While purchasing a new build represents an exciting time for homebuyers, the process brings with it a number of unique concerns and considerations for those in the market for a new home.

Understanding the conveyancing process

Conveyancing, the legal transfer of property from one person to another, plays a critical role in the purchase of any home.

For new builds, this process begins with the reservation of the property. Buyers typically pay a reservation fee to secure their chosen plot, after which they enter a reservation agreement.

This period, usually lasting 28 days, provides buyers with the exclusive right to purchase the property and allows solicitors to conduct necessary legal checks.

What issues might I face?

Buying any home carries certain potential challenges, but a new build will carry some unique pitfalls, which may include:

  • Boundary inaccuracies – It’s not uncommon for there to be errors in boundary positions when building new properties, which can lead to corrections being needed down the line. You should inspect the conveyancing plan carefully to check it matches your expectations.
  • Restrictive covenants – You may find that new developments come with covenants restricting what you can do to your property in the future, including building a conservatory or storing a commercial vehicle at the property.
  • Quality issues – Without a previous owner to identify existing issues, you’ll need to be particularly cautious when it comes to your home survey to identify any structural or other snagging issues that need to be resolved. Your lawyer will check that a new home warranty is available for the property.
  • Ground rents – If you buy a leasehold property, developers commonly try to include ground rent clauses. Careful checks will need to be made to ensure no unlawful ground rents are included, which could leave the house unsaleable.

It’s also possible that a housebuilder will try to get you to use a particular solicitor – but it is not legal for this to be forced and you do not have to use a solicitor that you’re not happy with.

What searches and checks should I make?

We can help you undertake due diligence before buying the property.

This includes scrutinising the developer’s title to the land, planning permissions, and any conditions attached to the development.

Local authority searches will reveal information specific to the building plot, to include planning permissions and development agreements which may affect the use of the property.

Environmental searches are also vital, identifying potential issues such as flood risk or land contamination.

The impact of delays

One significant factor when buying a new build property is the reliance on the developer’s completion timeline, which can be subject to delays.

These can impact your mortgage or other financing and may also affect your ongoing chain.

How does exchange and completion differ for new builds?

The exchange of contracts marks the point at which the agreement to purchase becomes legally binding.

For new builds, this often occurs before the property is fully constructed, so it is important that you understand the commitment you’re making when buying a new build property that hasn’t yet been completed.

Completion, when the buyer officially takes ownership, can be on a fixed or ‘on notice’ basis. The latter is common for new builds, where the completion date depends on the construction’s progress.

We can explain the process for buying a new build property and the options available and support you through other challenges facing you and your new property.

To avoid unwelcome surprises when buying your new build property, please get in touch with our Residential Conveyancing team.

Becky Cutting

Chartered Legal Executive

I joined Mander Hadley in 2019 as a Conveyancing Executive in the Residential Property team.