As the government continues to support the building of new homes, there’s a decent chance that the property you’re interested in buying is going to be a new build. As there are plenty of differences when it comes to buying a new build property, it’s really important that you choose a new build conveyancing solicitor who’s experienced in working on new build purchases.
How does conveyancing for new builds work?
As a buyer of a new build you often have to commit to your purchase before the building work is completed, which is why the new build conveyancing process is often different to buying an older home. You may be buying a property before construction has started or while your new house is being built, so you’re effectively going off what you’ve seen in the show home or a computer-generated set of drawings.
The conveyancing process for new builds step by step
Step 1: Buyer reserves the property
The buyer is usually expected to put down a non-returnable reservation fee between £500 and £2000.
Step 2: Buyer instructs a conveyancing solicitor
Choose a new build conveyancing solicitor, experienced in working on new build purchases.
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Step 3: New build conveyancing checks are carried out
This is usually a much quicker and more intensive process with only 28 days to exchange contracts
Step 4: Buyer pays the deposit
This is 10% of the total new build price
Step 5: Exchange of contracts
This is usually within four weeks from reserving the property
Step 6: Completion
This is the date when your conveyancer will transfer the funds provided to the seller’s lawyer
Before new build conveyancing begins
After deciding to go ahead and buy, you’ll likely have to put down a reservation fee of between £500 and £2000. This usually isn’t returnable but will come off your purchase price when you reach completion.
As soon as you have an offer accepted on a new build home, you need to immediately instruct a conveyancer and get your mortgage in place. Deadlines can sometimes be extended, but you may find that there’s a financial incentive for meeting agreed timescales and not losing both your reservation fee and the house.
During the buying process
It will be up to you and/or your financial adviser to keep in touch with your lender and either arrange for an extension to the product you have chosen, or switch to an alternative. Either way you must make sure you have a valid mortgage offer in place for when the property is eventually built.
Your conveyancer will have to thoroughly check the title documentation, planning permissions, building control and any warranty of your new house for you. This is often a lot more complicated compared to normal transactions. As your legal representative may need clarification in order to thoroughly check the contracts, you must be in a position to answer any queries as quickly as possible.
You will then pay a 10% deposit to your conveyancing solicitor who will transfer this to the seller’s solicitor, unless you are buying with the Government’s Help to Buy scheme, where the deposit is 5%. Look out for developers registered with a warranty provider as this will protect your 10% deposit from penalties from withdrawing from the sale if there are unreasonable delays.
The last steps: Exchange and Completion
Once you’ve reserved the property, you’ll typically have four weeks to exchange contracts. If you don’t manage to do this, then the builder can pull out of your deal, meaning you lose both your reservation fee and the house. If the development you’re buying into is very popular, builders can be particularly ruthless when it comes to hitting timescales. For more information on exchanging contracts please read our house buying checklist.
Once everything’s been ironed out, including details such as local searches, you can work towards exchanging contracts. To provide additional peace of mind, you should receive a ten-year guarantee from the builder which is usually provided by the National House Building Council (NHBC), Buildzone, Premier Guarantee or another specialist warranty provider. You should ensure that you know exactly what is and isn’t covered and for how long before you agree to exchange contracts. For more information about buying your first house read the First Time Buyers Guide.
New Build Conveyancing FAQs
Is new build conveyancing more difficult?
Yes, difficulties may be faced with non-compliance of planning regulations, NHBC inspections not being arranged, discrepancies in the site and location plans, local authority agreements and the completion of the roads and sewers over the whole development.
What is different about new build conveyancing?
Unlike purchasing an older property, a new build property may not have been built, or in the process of being built, when the buyer purchases it.
It is usual to have only four weeks to exchange contracts after reserving the property.
Compared to buying an older home, a fixed completion date is often not given. Instead, written notice is given to the buyer when the property is structurally complete, for completion to be carried out within a set time, usually 10 working days.
What happens when you reserve a new build?
You will typically have four weeks to exchange contracts. If you don’t manage to do this, then the builder can pull out of your deal, meaning you lose both your reservation fee and the house.
As soon as you have an offer accepted on a new build home, you need to immediately instruct a conveyancer and get your mortgage in place.
What should you be on the lookout for?
Delays outside of anyone’s control such as extreme weather conditions and shortage of materials
Making sure that your mortgage offer will not expire before completion
Knowing exactly what is and isn’t covered in the National House Building Council (NHBC) ten-year guarantee (or equivalent)
Developers registered with a warranty provider which will protect your 10% deposit from penalties from withdrawing from the sale if there are unreasonable delays.
To receive a personalised quote for new build conveyancing, complete our short quote form