New Build Pros & Cons - Monday 08 June 2009
In the current economic climate, buying a brand new build home may be a more attractive option, particularly for first time buyers. Here, Karen Lang, Partner with award winning Private Client Solicitors, Bird Semple weighs up the pros and cons of such a move!
There are a number of reasons why New Build may be more financially viable, hence the ideal option for you:-
1. In the first couple of years ongoing maintenance costs should be low and in most cases buyers have the comfort of an NHBC or Zurich ten year guarantee to cover structural defects.
2. In a bid to increase sales many builders are offering incentives to purchase which may include stamp duty and legal fees paid, cash back or discounts at settlement, free carpets and curtains etc. In many cases the bathroom and kitchen will be fitted out which is a considerable saving to a new buyer. It should be borne in mind however that the Council of Mortgage Lenders now require all incentives to be disclosed to the purchaser's lender.
3. New build properties tend to be "greener" and more energy efficient which will save on utility bills in the long run.
4. Some builders are offering Shared Ownership or Part Exchange Schemes to help purchasers, whilst others are building in partnership with Local Authority or Housing Associations which means that affordable housing is available to individuals who meet certain criteria.
But, there's always a downside. Despite these advantages, there are a number of things to consider when buying a new build property:-
1. It is likely you will have to pay a sizeable reservation fee and deposit which, unless otherwise stated in your missives, will not be refundable simply because you have not managed to get a mortgage or sold your own property if you are not a first time buyer.
2. With more Companies suffering the effects of the "credit crunch" you should research your chosen builder carefully to assess the risk of them going into Administration before the house is built.
3. If you are buying "off plan" ensure that you understand exactly what you are getting for your money. Check the plans carefully. The show home may not be the same style, size and layout as the property you are purchasing. It is advisable to do your research thoroughly and check out completed properties by the same builder to get a feel for the quality and finish that you can expect.
4. Make sure you are aware of your obligations in relation to the maintenance of any common parts of the development. Flats with lifts and developments with common amenity areas may have a slightly higher than normal maintenance charge.
5. Ensure you carry out a full snagging inspection of the property prior to purchase and ensure as many matters are dealt with as possible before completion to minimise inconvenience.
6. An entry date is not guaranteed and is usually triggered by the date the property is completed. It is important to remember this if you have a property to sell.
Whilst a new build is not for everyone, it is worth considering, particularly in a slower market.
If you are considering buying or selling property, it is always advisable to seek legal advice
before proceeding.
Karen Lang can be contacted at Bird Semple on
Tel - 0141 304 3434 or
Email - kl@bsemple.com
