People are definitely thinking twice about purchasing a property in the U.K. This is not surprising when taking into account the current economic situation. However, it is important to remember that purchasing a new build property in the current market does provide opportunities for not only first-time buyers but also investment buyers.
Developers are keen to ensure that they maintain volumes on sales and often offer very good deals and incentives for buyers. These opportunities are often too good to miss however it is important to ensure that buyers protect themselves from purchasing a property which is not fit for purpose on a building site which takes a longer time to complete.
When considering a new build property in the current market it is worth considering the following points:-
Negotiate on the Sale Price and Optional Extras.
There are deals to be had! Don’t be afraid to request a discount. If you are in a position to proceed, having already sold your existing home, or a cash buyer, or a first-time buyer with an agreed mortgage, you are in an ideal position to negotiate, so don’t be afraid to use it. In addition, remember you can insist on any Optional Extras to be included in the price – this will allow you to negotiate on the upgrades which in a stronger market may not be possible.
Part Exchange Deals.
If you haven’t sold your existing property, developers are at present, more prepared to look at part exchange deals when negotiating the sale of a new build property. This will enable you to use the equity in your existing property to purchase a new build property, without having to sell the house separately. This may suit a number of people but again there are always points to consider when pursuing this route.
For instance, a part-exchange deal can come with restrictions, and it is important to look closely at the terms and conditions of the deal. For instance, the home being traded it only traded at a value of no more than 70% of the selling price of the new home or; a maximum part exchange value accepted by the developer is around £350,000.
If your home is already on the market with an estate agent, you should also check that you will not still be liable to pay the agreed commission to the agent on the Part Exchange sale.
So again please look at the part exchange offer in detail to ensure that you are securing the best possible deal.
Negotiating a Fixed Completion date
This is easier said than done, as new build properties are often purchased off-plan. However, if when negotiating your purchase you know that your property is almost build complete then try and get a fixed completion date on exchange of contracts. A fixed timescale for completion will ensure that your property is not delayed. In a fluctuating economic market, it has been known that some developers may concentrate on other phases of the development, prioritising other plots which may be more profitable when it comes to their build programme.
Energy Efficient.
It is a given that New Home Builds are more than four times more energy efficient compared to a second-hand home. This enables buyers to take advantage of the low running cost associated with most new build properties as well at ticking a more environmentally friendly way of living.
New Stock in your area.
It is also worth considering the new stock situated within the area you are looking. The higher levels of new builds being built in the area may affect the deals that are on offer.
Avoid a chain.
As mentioned above many new builds are often bought off plan so you may have to wait some time prior to being able to move in. However, as the developer is on top of the chain, there is less stress as you are avoiding being in a chain situation.
The current market offers a great opportunity for prospective buyers. If you are thinking of purchasing a new build don’t be afraid to talk to the developer directly to see whether you can secure a deal which benefits both you and the developer who is keen to ensure that their plots sell. Be mindful of your situation as you may be surprised what your money can actually buy!
If you wish to discuss any matters relating to new build properties then please contact Anju Newcombe at WBW solicitors on 01392 260113 or email anjunewcombe@wbw.co.uk.
WBW has offices in Torquay, Paignton, Newton Abbot, Exeter, Bovey Tracey, Exmouth, Honiton, Sidmouth, Launceston, Axminster, Chard and Seaton.
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
