Buying Advice

Buying a New House

The great majority of new properties are protected by an NHBC warranty. If the property that you are considering does not have an NHBC certificate, you should proceed only with the greatest of caution. It will be essential to commission your own survey in order to check that the property has been built to a satisfactory standard. Even if the survey does give the property a clean bill of health, you need to bear in mind that a new property which does not have an NHBC certificate might be quite difficult to resell.

Knowing what the Warranty Covers

If the property that you are buying does have a NHBC warranty it will be guaranteed for ten years against structural defects. There is therefore probably no need to commission your own structural survey. However, it is important to appreciate that the NHBC warranty only covers major defects. It does not cover the cost of rectifying the more minor teething problems that seem to affect so many new homes.

There are five things you can do to reduce the chance of buying a defective new home:

  • Buy from a developer with a reputation for quality. The new homes industry runs its own awards scheme.
  • Don't just view the show home. Ask to inspect several other properties on the site before you buy and make your own assessment of the quality of the finish.
  • Try to talk to other people on the site and ask if they have experienced any teething problems with their properties. If so, how efficiently did the developer deal with them?
  • Telephone the after-sales office on some pretext or visit it if it is on-site. These are the people who will be responsible for rectifying any defects. Their attitude speaks volumes about the developer's attitude to customer service.
  • Consider visiting other developments built by the same developer in the area. Do they still look bright and new? Again try to talk to some of the residents and see if they have had any problems. 
     

How much can you afford

The first thing you need to do is decide how much you can afford. You will need to look at how much money you have available yourself and how much you can borrow. There are a number of different financial institutions which offer loans to people buying a property, for example, building societies and banks. You should find out if you are able to borrow money and if so, how much (for information on mortgages, see under heading Mortgages).

Some building societies now provide buyers with a certificate that states that a loan will be available provided the property is satisfactory. You may be able to get this certificate before you start looking for a property. Building societies state that this certificate may help you to have your offer accepted by the seller.

Before finally deciding how much to spend on a property, you need to be sure you will have enough money to pay for all the additional costs. These include:-

  • Survey fees
  • Valuation fees
  • Stamp Duty Land Tax. This is payable on properties costing more than £125,000 and is at least 1% of the purchase price (in a limited number of areas, designated as 'disadvantaged', it is only payable on properties costing £150 000 or more)
  • Land registry fee
  • Local authority search
  • Fees, if any, charged by the mortgage lender or someone who arranges the mortgage, for example, a mortgage broker
  • The buyer’s solicitor’s costs
  • VAT
  • Removal expenses
  • Any final bills, for example, gas and electricity, from your present home which will have to be paid when you move.

For more information about Stamp Duty Land Tax, go to the HM Revenue and Customs (HMRC) website at www.hmrc.gov.uk/so, or ring the HMRC Stamp Office enquiry line on: 0845 603 01350845 603 0135.

On some properties, where the seller has to provide a Home Information Pack (HIP), the seller will pay for local authority searches.

For more information about Home Information Packs, see Selling a home.

You should be aware that if you start the process of buying a property and then the sale falls through you may have already paid for a valuation and/or a survey. If the solicitor has started any legal work you may also have to pay for the work done.

You should also take into account the running expenses of the property you wish to buy. These may include:-

  • Heating bills
  • Community charge/council tax (in England and Wales)
  • Water rates (in England and Wales)
  • Ground rent, if the property is leasehold
  • Service charges, if the property is a leasehold flat
  • Insurance costs, including life insurance, buildings and contents insurance.

You will also have to pay a deposit on exchange of contracts, up to 10% of the purchase price, a few weeks before the purchase is completed and the money is received from the mortgage lender.

 


© Peak Quality Homes 2010