Buying New Build With Confidence (Part 1)Buying New Build With Confidence (Part 1)
David Bexon, Managing Director of SmartNewHomes.com:
“In the current climate, the ability to exceed customer expectations and provide a high standard of home is absolutely essential for developers. Restricted finance in the mortgage market means that buyers are fairly scarce and this has resulted in sluggish sales activity across the board.
“Developers are doing all they can to facilitate the home buying process, and their role as enablers has lead to an explosion of incentives being made available to new home buyers, from price protection and stamp duty paid to part exchange and shared equity – making the new homes market the most attractive and attainable route into property ownership in today's market.
David Bexon answers questions on purchasing a new home
What do consumers need to be aware of?
Make sure your home comes with a new homes warranty
“When buying a newly-built or converted home it is likely the home will come complete with a 10-year warranty such as NHBC 'Buildmark' scheme.
“NHBC is the standards setting body and leading warranty provider for around 85% of all new homes registered in the UK. With approximately 20,300 registered builders who agree to comply with their Rules and house-building Standards, around 1.6 million homeowners currently benefit from NHBC Buildmark warranty.
“When buying a brand new home make sure you have a warranty like Buildmark to help you secure a mortgage, as lenders prefer to lend on homes that have this type of cover because they know the home will have been built to specified standards of construction.”
Details on the warranties available
“New home warranty offers solid reassurance to those who are apprehensive about entering the property market in the current difficult climate.”
The warranty deal available to the homeowner varies slightly depending on the provider, but they all provide the following basic cover:
- 10 year Structural Insurance Period (SIP), which covers any structural damage caused by latent defects - a fault in the property that could not have been discovered by a reasonably thorough inspection before the sale
- Two year cover for snagging defects – defects reported by the owner such as the need for plasterwork patching and redecoration, broken tiling etc. If defects are not rectified by the housebuilder during this period, the warranty provider offers its own resolution service
- If the housebuilder goes out of business, the warranty provider will pay for the home to be completed or return the buyer’s deposit, depending on the scheme
Making sure you get the home you put your deposit down on
“If you purchase a new home off-plan, you will be given a plot number and this should not change at any stage throughout the buying process.
“Your solicitor will be aware of the plot number you have purchased and will ensure everything is correct in your contract.”
What should you do if there are any problems after purchase?
“If you have not been in the property long, initially you should approach your housebuilder as it may be something they can rectify quickly and easily. If not, or you are not happy with the housebuilder’s response, you can go to your warranty provider, who will deal with the matter. Typical problems tend to be superficial and easily rectified.
“Your new homes warranty will cover snagging defects for the first two years, such as the need for plasterwork patching and redecoration, broken tiling etc. If defects are not rectified by the housebuilder during this period, the warranty provider offers its own resolution service.”
How can you be sure the property will be finished on time?
“Unfortunately there is no way of guarenteeing that your home will be built by the date that is initially quoted, as unforeseen circumstances can cause delays in the construction process. However, it is unusual for a mainstream developer to encounter issues that might lead to lengthy delays.”
What happens if you purchase, then have problems afterwards but the builder has gone out of business?
“As long as you have your NHBC warranty, or similar product, you are covered. The NHBC warranty provides a 10 year Structural Insurance Period (SIP), which covers any structural issues, as well as two-year cover for snagging defects (see above).”
NEW BUILD TOP 10
Some of the top developer deals from around the country – available on www.smartnewhomes.com
Below is just a small selection of some of the fantastic deals currently available in the new homes market, highlighting the wealth of options available to those looking to make a property purchase.
Smartnewhomes.com has all the deals to get you moving, whether you are a first time buyer or a home owner struggling to sell your existing property. For all the latest, hottest deals visit the new, easy to use interactive special offers page: www.smartnewhomes.com/Content/SpecialOffers.aspx
Guaranteed house price until 2011 - Barratt Homes
Barratt is offering to protect the price that owners pay for their new home, with a new 3 year value guarantee. If owners want to sell their property within three years of the purchase, and the value is lower than the price they paid for it, Barratt will refund up to 15% of the difference.
Own 100% of the home but only pay 75% now - Miller Homes
MiWay by Miller Homes is not a shared ownership scheme. Homebuyers own 100% of the home from day one. Homebuyers arrange their own finance for 75% of the purchase price and Miller Homes will provide a loan for the remaining 25%. Owners must repay the loan after 10 years or if they sell the property during this period.
4.99% Mortgage Rate - Stewart Milne
Stewart Milne is offering a guaranteed 4.99% mortgage rate fixed for three years, with no arrangement fees required.
6% Rental Yield until 2012 - George Wimpey
For a limited period George Wimpey is offering a buy-to-let option across a wide range of developments. The developer is guaranteeing a gross rental income of 6% and will find a tenant for the buyer. If no tenant is found the 6% yield is still guaranteed by the developer.
Chain-Break Scheme - Countryside Properties
Countryside Properties have introduced a scheme to tackle delays caused by unsold homes in an incomplete property chain, by offering to buy the home that is causing the hold-up.
Range of attractive part-exchange deals at developments throughout the country - David Wilson Homes / Linden Homes
Allows buyers to purchase their new home without having to wait to sell their old one. The developer will buy the old property meaning the owner will not have to pay any estate agent fees to pay or to arrange a HIP.
To read the remainder of this article, please click here.