Why Do New Build Property Transactions take So Long?
Buying a new build property usually takes much longer than others. There are a number of very good reasons for this so if you’re buying a new build, make sure you know exactly how the buying process will work.
Buying Off Plan?
New build properties are often sold off plan. This simply means that the properties will not be built yet and that the developer may have a show home or even just a Marketing Suite to try to sell the properties. They will use the show home to demonstrate how the finished property will look or they could have artist impressions of the finished properties.
As a result, completion of your new build property could take months or even up to a year. Developers often build new build properties in phases and your property may well be in one of the final phases so you need to be clear on how long it will be before your property will be ready.
Before you agree to buy a new build property make sure the developer gives you a clear indication of when completion is likely to happen, as long-time delays can also have an impact on your mortgage.
Mortgage Offers on New Build Properties
Before you agree to buy a new build property, you will need to get a mortgage agreed. Many mortgage offers are only valid for six months. Because your new build may take longer than this, your mortgage offer could expire before completion. This could be a real problem when you’re nearing completion.
To avoid any issues with the expiry of your mortgage offer, make sure you discuss your circumstances with your mortgage lender at the outset so they know they may need to extend the mortgage offer. They may agree to do this, but they will only usually extend any mortgage offer for a couple of months.
If your mortgage lender won’t extend any offer, you may need to find another lender who will, or you will have to re-apply for a new mortgage offer. There are some lenders who offer specific mortgages for new build purchases for this reason so do you your homework first.
This all takes time and you will be contracted to tight timescales once the property is ready so make sure you are absolutely clear about what you’ve agreed to.
For free initial advice call our Conveyancers and Conveyancing Solicitors.
You will pay a reservation fee on a new build property. Whilst this is not directly related to the amount of time buying a new build takes, if you cannot meet the agreed timescales to exchange contracts, you will lose your reservation fee. This can be anywhere from £500 to £2,000. If you do exchange on time, this amount is deducted from the final purchase price.
Choose an Experienced New Build Conveyancer
Although new build property purchases take a long time, once exchange happens, completion comes soon afterwards. Having an experienced New Build Conveyancing Solicitor to help you buy your new property will make sure that all deadlines are achieved.
With Simpson Millar, your Conveyancing Solicitor will help you to understand the contract, including if the property is leasehold or freehold and finding any restrictive covenants attached to the property. These could be in the lease or attached to the title. These can include things like doubling ground rent clauses and clauses to stop you making any alternations to your property without paying a permission fee first. Restrictive covenant clauses can cause issues if you decide to sell on the property at a later date so being aware of them allows you to deal with them or withdraw from the purchase.
So you can see that there are a few reasons why new builds property purchases take longer than normal purchases do, but with the help of an experienced Conveyancing Solicitor, you should get through the process with as little stress as possible.
Simpson Millar Solicitors are a national law firm with over 500 staff and offices in Bristol, Cardiff, Lancaster, Leeds, Liverpool, London, Manchester and Southport.