New Build

New Build Mortgages.

 

If you’ve got your eye on a new build, then we can help you get a new build mortgage! There are a few things that differ from regular property sales, so we’ve detailed the top facts and tips below.

At TW Mortgages, we are a free mortgage advisor for New Build Mortgages, Buy to Let, Help to Buy schemes and so much more. Get in touch today for free advice and we will endeavor to get you into your dream home as stress-free as possible. Buying a home is exciting, so let’s keep it that way!

What is a New Build?

 

A new build property is one that’s been newly built within the last 2 years and hasn’t been sold during that period. It could also be applicable to a property where the work hasn’t begun on the land yet, or it’s in the process of being built (known as ‘off-plan’).

Purchasing a new build off-plan property is slightly different from purchasing an older property as it has a different set of considerations that go along with it. 

The main difference with an off-plan property is that you will be committing to buying a home which doesn’t technically exist yet. Although the building company may be able to show you the property’s plot of land and they can show you a show home with a similar specification, it’s still a risk to purchase a property that you haven’t physically been able to view or had a surveyor assess.

Are there extra costs with a New Build mortgage?

 

The developer is likely to request a reservation fee which will be around £500 - this payment will show your commitment to purchasing the property. But do note: it is non-refundable so you’ll lose this money if you choose to walk away from the purchase.

The pros of a New Build Mortgage:

 

As with all property purchasing, there are pros and cons. New builds tend to be in better condition than older properties meaning you could save on repairs and maintenance costs. They also tend to be more energy efficient and you may be able to dodge costly delays of the regular house-buying processes (e.g. chains). 

Another great advantage to buying a new build property is the fact that you can customise it to your tastes. You will have a meeting with your agent who will show you a range of designs from which you can pick your favourite. This might include kitchen work surfaces, tiles, flooring and carpets. When you move into the property it will be exactly how you want it, saving you from several months worth of decorating after moving in.

The cons of a New Build Mortgage:

 

When you commit to buying a new build property, it may be another 9 months to a year before you can actually move in. This means you’ll have to take special consideration when applying for a new build mortgage.

A lot of mortgage providers only allow 6 months on your mortgage offer, which isn’t very helpful if your property is going to take at least 9 months to build. Some lenders recognise the new build situation and will extend your mortgage offer up to 9 months to ensure your offer is still valid up to the point where you can complete.

If the build takes longer than initially proposed, then you may need to apply for a new mortgage and a new mortgage offer. If your circumstances happen to change since you applied for your first mortgage, then you may be at risk of not getting your mortgage offer from your original lender.

With new build properties it is quite common for you to exchange contracts shortly after reserving the property and a long time before moving in, unlike with an older property where you would normally exchange contracts a few days before moving in. It is important that you note that once you’ve exchanged contracts, you are the legal owner of property. You won't be able to change your mind about the property or pull out without losing your exchange of contracts deposit, which is usually 10% of the purchase price.

Top tip for when it comes to buying a New Build property:

 

New Build properties have received a lot of bad press about their building standard, but that’s usually down to the building company involved. Like any product or service, there will be reputable companies and… well, not so reputable companies.

It’s a good idea to research the building company involved - some promise that they will resolve any issues with the property within a certain timeframe. This provides much needed peace of mind in case you discover any issues shortly after moving in.

Be sure to check the type of building certificate or guarantee to certify that work done is to a specific standard. One of the most common ones is the NHBC certificate - see below for a list that may be accepted by your mortgage lender: 

  • Advantage HCI

  • Aedis Warranties Ltd

  • Ark Insurance Group Ltd

  • Build Assure New Homes/Build Assure 10

  • Building Life Plans (BLP)

  • Build-Zone New Home Warranty

  • Checkmate Castle 10 Home Warranty

  • Global Home Warranties Ltd

  • International Construction Warranties Ltd (ICW)

  • Local Authority Building Control (LABC) New Home Warranty

  • NHBC

  • One Guarantee

  • Premier Guarantee

  • Protek

  • The Q Policy

If the building company does not offer a certificate that is on the above list, we recommend you look further into it. 

Here at TW Mortgages, we give free advice, no matter what your mortgage needs are, get in touch with us as we are a free mortgage advisor for new build mortgages, buy-to-let mortgages, help to buy mortgages and more! Get in touch today.