New Build Conveyancing Explained

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

Read here for more information on conveyancing.

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.

Click here to get a personalised conveyancing quote.

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.