New Build Conveyancing FAQs

This will depend on the stage of construction of the property. If building works have not yet started or are at a very early stage, you will be given an estimate of when the property is expected to be completed. As the property nears being finished, the developer will be able to fix a more accurate completion date.

You should remember that this is only an estimate and that sometimes delays can occur, for example due to bad weather. If you are buying a property that has already been built and is finished, then it is likely that the developer will be able to agree a fixed completion date at the time that the contract is exchanged.

When agreeing to buy a new build home it can be difficult to give an exact completion date meaning that for many new build house purchases completion is on notice. This means that completion will take place at a later specified date.

Often the competition for specific plots means that buyers exchange contracts (ie enter into a legally binding agreement to buy the home) well before the developer can give a specific date when the building will be finished. 

In such circumstances, the developer and buyer will agree that completion will take place and the keys handed over on a date to be specified later, after the developer has given a number of days’ notice in advance that the property will be ready for occupation.

The process is slightly different from buying a second hand home as you do not need to wait for the seller to find another house to buy. Once you have decided upon a property, you will usually pay a reservation deposit to the developer. This secures the property for a fixed period to give you time to arrange mortgage finance (if needed) and for your conveyancer to carry out the legal work required before ‘exchanging contracts’ (ie when the agreement becomes legally binding). Developers cannot be expected to reserve a property indefinitely so you may run the risk of losing the reservation deposit if contracts are not exchanged within the reservation period. The contract will state the date on which the property will become yours: this might be a fixed date or if the property is not yet finished, on being given a number of days’ notice.

After you pay your reservation deposit, you will also need to give the name of your conveyancer to the developer. You will also arrange your finance, for example a mortgage. The developer’s conveyancer sends the contract papers to your conveyancer who will make the appropriate searches and raise any queries about the property. You can then be sure everything is in order before you exchange contracts. 

The contract details the terms of the agreement between you and the developer. When your conveyancer is satisfied with the replies to their enquiries and the search results and is in receipt of your mortgage offer (if applicable), you will sign the contract which your conveyancer will hold until both you and the developer are ready. At the point your conveyancer exchanges contracts with the developer, the agreement becomes legally binding on both parties.

Your conveyancer will pay the deposit to the developer at the time contracts are formally ‘exchanged’ ie the agreement to buy becomes legally binding. Your conveyancer will let you know when and how you should pay the deposit; usually when arranging for you to sign the paperwork.

The Consumer Code for New Homes, approved by the Chartered Trading Standards Institute, sets standards for the marketing, selling and purchasing of new homes to be adopted by developers who register with the Code.  

The checks made on behalf of the buyer will also protect the lender. Individual lenders may have specific requirements, for example as to the warranties they will accept.

Lenders need to know about any incentives, even if indirect, offered to the buyer. Your conveyancer will need to send the lender a copy of the ‘UK Finance Disclosure of Incentives Form' provided by the developer.

You should check with the developer and your preferred broadband supplier to check your requirements will be met and to see what arrangements you need to make. If there is going to be a delay before broadband is available, you may wish to make interim arrangements.

The Consumer Code for New Homes, approved by the Chartered Trading Standards Institute, sets standards for the marketing, selling and purchasing of new homes to be adopted by developers who register with the Code.  

The Code does not replace existing legal rights but the standards ensure that documentation is clear, contracts are fair and transparent, information about the property is accurate, deposits are protected and minimum standards for aftercare are observed.

The Code provides a clear complaints process supported by a low cost dispute resolution for consumer complaints made in writing to the developer within two years of the date of the purchase.

The level of cover will vary depending on the individual warranty. Generally protection covers the cost of repairs resulting from the developer not building in accordance with specified requirements. Some warranties also cover the cost of repairs due to non-compliance with building regulations and some also cover the cost of cleaning up the land in the event that the local authority takes enforcement action in respect of contamination. 

The duration of the warranty should be checked for example, all defects may be covered for the initial 2 year period and only major structural damage for the following 8 years. Second and subsequent owners will also benefit if defects are discovered during the warranty period. 

It is also advisable to check that the warranty protects the amount of the deposit in the event that the developer goes into liquidation.

Often the developer enters into an agreement with the Local Authority and drainage supplier to construct the road and sewage system to their specification and for the relevant authorities to assume responsibly for upkeep after an initial maintenance period. Your conveyancer will check what arrangements are in place.

Help to Buy equity loans from the Government help buyers who would otherwise find it difficult to find a 10% deposit. You may be eligible whether you are a first time buyer or an existing homeowner.

The Government lends the buyer up to 20% of the purchase price so they only need a 5% cash deposit and a 75% mortgage from a qualifying lending institution (e.g. a bank or building society). In return for the ‘Help to Buy loan’, the Government takes a share of the future sale proceeds equal to the percentage contribution at the time of purchase.

For the first five years there are no fees to pay: after that buyers pay an additional interest of 1.75% p.a. on the outstanding Help to Buy loan. After that this fee increases annually by the increase in the Retail Price Index (RPI) plus 1%. The Help to Buy loan itself must be repaid after 25 years, or earlier if you sell your home.

First time buyers can boost their savings by 25% if they save into a Help to Buy ISA. For every £200 saved, first time buyers receive a government bonus of £50. The minimum bonus is £400 and the maximum bonus £3,000, so there must be at least £1,600 saved before the bonus can be claimed.

Help to Buy ISAs are available from a range of banks, building societies and credit unions. To kick start the account, £1,200 can be deposited in the first month and after that up to £200 per month.

Help to Buy ISAs are available to each first time buyer so those buying with their partner, for example, could receive a bonus of up to £6,000 towards their first home.

The bonus is transferred to the buyer’s conveyancer and is added to the money being put towards the first home (it cannot be used until the day of completion, so you cannot put it towards the deposit payable on exchange of contracts or legal fees etc.).

When purchasing a new build home, buyers can ‘part exchange’ their existing property. Instead of putting it on the open market and seeking a buyer who is able to move within your desired timescales (and can be flexible on the actual moving date), the developer agrees to buy your home from you. 

Choosing to part exchange your home means you will be ready to move when your new home is finished; there will be no chain; there will be no worry that the buyer may pull out; there will be no estate agent fees and there will be an easier moving day.

The price paid for your existing home is generally agreed after two independent valuations and a survey made on behalf of the Developer. The price will therefore be fair and it is worth bearing in mind the amount of money you will save and the stress you will avoid when considering the overall deal.