A Guide to Buying a New Build Off-Plan

Are you thinking about buying a brand-new home? Well, you might have the chance to snap one up off-plan. This option is quite popular, especially for first-time buyers who can benefit from various help-to-buy schemes. It’s an exciting prospect because you often get to add your personal touch to the property. But like any home purchase, there are pros and cons to consider when buying off-plan. So, before you make a decision, let’s dive into what it’s all about and how the legal – known as conveyancing – works.

Buying off-plan means you’re purchasing a property before it’s even built. Sometimes, you’re making the deal when construction hasn’t even started. This might sound a bit daring, but there are some perks.

Apart from having the chance to personalise your new home, you also don’t have to deal with a property chain, and there’s less work to be done when you move in. Plus, there can be financial support options available for off-plan homes.

Even though you won’t see the finished property, most major developers can provide you with a good idea of what to expect. Many of them have show homes that are very similar to the ones you’re interested in. So, you can get a feel for the space and even pick up some interior design ideas. At the very least, they should give you computer-generated visuals and detailed floor plans to help you understand what you’re buying.

There’s no strict rulebook for buying off-plan, but it’s a good idea to follow these steps to make things go smoothly:

Step 1: Explore Suitable Developments
Start by researching and visiting developments in your desired area. If you plan to use a help-to-buy scheme, check if these developments qualify.

Step 2: Speak to a Mortgage Advisor
Talk to a mortgage advisor and explore your financing options. You might even want to get a mortgage agreement in principle. This is like a golden ticket that confirms how much a mortgage provider is willing to lend you. It makes you more appealing to developers.

Step 3: Make an Offer
Once you’ve set your sights on a property, go ahead and make your offer. If it’s accepted, you’ll typically be asked to pay a reservation fee to secure the property while you sort out your mortgage. This fee can be around £1,000 and is usually non-refundable.

Step 4: Appoint a Conveyancing Solicitor
Now, you’ll need a conveyancer or solicitor to handle the legal aspects of your property purchase. They’ll ensure everything is in order with the development and your specific plot. Developers usually set a deadline for exchanging contracts for off-plan purchases, typically within 28 days of the purchase agreement.

It’s a good idea to be well-prepared and learn about new-build conveyancing and the conveyancing process in general.

Step 5: Sort Out Your Mortgage
While the legal work is underway, finalise your mortgage with a provider. They’ll arrange for a valuation based on the property’s plans and specifications.

Step 6: Get the Paperwork Done
You’ll need to complete all necessary paperwork, with the help of your conveyancer, by the developer’s set deadline. Your conveyancer will facilitate the exchange of contracts and deposits.

Step 7: Plan Your Move-In
Keep two dates in mind. The first is the ‘build completion date,’ which is when the developer expects the property to be ready for you to move in (although it’s more of an estimate). The second is the ‘long-stop date,’ which is the latest date the developer expects to complete the property.

Let’s weigh up the pros and cons:

Advantages

• Personalisation: With off-plan buying, you can often choose fixtures and fittings, making your new home just the way you want it, no renovations needed.
• Guarantees: New-build homes usually come with a 10-year warranty for structural issues, plus manufacturer warranties for fixtures and fittings.
• No Property Chain: Buying directly from a developer means there’s no chain of buyers and sellers to slow down the process.
• Potential for Value Increase: Depending on the property market, your home’s value could rise significantly before you even move in.

• Mortgage Challenges: Delays in construction could mean your mortgage offer expires, and you’d have to reapply, possibly with less favourable terms.
• Deposit Vulnerability: If your mortgage offer expires, and you can’t secure a new one or pay the balance yourself, you could lose your deposit and face potential legal issues with the developer.
• Potential Value Decrease: If property prices drop, you might find it challenging to secure a mortgage, risking the loss of your deposit.
• Delays: Construction setbacks are common and can lead to uncertainty about your moving plans.
• Teething Issues: When you first move in, expect a few hiccups, from things not working correctly to issues with mail delivery. You might also face disruptions from ongoing construction if your plot is one of the first to be completed.

Top Tip: Consider arranging a snagging survey a few days before final completion. A surveyor can inspect your property for issues that the developer should fix before you move in.

• Developer Reputation: Investigate the developer’s track record. Do they have a history of late project deliveries or cutting corners? Try to speak with residents from their previous developments on online forums.
• Property Viewing: Confirm if you can view the property before completion. This is crucial for spotting and addressing any issues.
• Ongoing Disruption: If your property will be completed before others in the development, find out how long any disruptions from construction are likely to last.