Some financial gurus are predicting a fall in interest and as more and more new build properties are coming onto the market for sale, there also appear to be more and more schemes available providing buyers with financial assistance.

Not every developer will offer such schemes however it is worth asking the developer whether any of these schemes are available prior to committing to your purchase as it may affect your financial ability to proceed. Below is an outline of a few schemes offered by developers: –

Part-exchange

Developers are offering to take on your existing property in exchange for a new build property. When looking at this scheme you need to compare the price that the developer is offering to pay for your property together with what the property is valued at on the open market.

Smooth move

Some developers are offering a service where they will make the whole process of selling your old property much easier. This service is limited to a few developers, but it is worth asking whether this scheme is offered when looking at new build properties. Under this scheme, the developer will arrange for an agent to value and sell your property and instruct the agent on your behalf.  Once a buyer is found you will then be allowed to reserve your plot with the developer.

Shared ownership

You will find that several properties on new developments are sold under a shared ownership scheme. This scheme allows you to purchase a share of the equity based on the percentage of the open market value. You will own part of the new build property on completion and usually you will have the opportunity to increase your equity share. Equity share schemes do differ, so it is important that you choose the right scheme which works for you.

Deposit scheme

Some developers offer a deposit assist scheme where if a friend or family member contributes a minimum of 5% towards your deposit to buy a new build property, the developer will in return give them a sum after you have completed the purchase. Some developers will also provide you with a fixed sum after completion to assist with moving costs. Again, this scheme is limited to a few developers.

Deposit unlock scheme

This scheme helps first-time buyers and home movers to buy a new build property with a 5% deposit. The deposit unlock scheme provides mortgage options which will accept first time buyers who only have a 5% deposit.

On a deposit unlock scheme you may be able to purchase a new build property with just a 5% deposit rather than a higher deposit as the house builder insures the mortgage offered to you. There are only limited lenders that will participate in this scheme, and it is only exclusive to new build homes.

First Home Scheme

Some developers will offer a first home scheme to assist local first-time buyers to get on the property ladder. This scheme allows a buyer to purchase a property with a 5% deposit and it allows for at least a 30% discount compared to the market price. Prior to proceeding, you will have to ensure that you are eligible for the scheme and the developer will provide you with the criteria.

As you can see there are several schemes available to assist first time buyers and non first-time buyers purchasing a new build property and it is worth considering looking into the different schemes to see whether any of them fit your circumstances.

If you have any questions regarding new build properties, please do not hesitate to contact me, Anju Newcombe on 01392 260113 or email anjunewcombe@wbw.co.uk.

WBW Solicitors has offices in Axminster, Bovey Tracey, Brixham, Chard, Exeter, Exmouth, Honiton, Launceston, Newton Abbot, Paignton, Seaton, Sidmouth, and Torquay.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.