Donation

When you buy a new home, keep in mind you can ask as many questions as you want and take as long as necessary before writing out that reservation cheque. It is possibly a good idea to request that the particular property be held for you overnight, so you can have more time to consider the property before making a final decision to buy.


Buying a new home using  Part-Exchange?


What is the House Builders financial End of year date?


What selection choices and specifications are available?


When is the new home due to be completed?


Where are the Social housing plots?


More on The Consumer Code for Home BuildersAsk for a copy of the Consumer Code for House builders

The Code comprises of 19 requirements that home builders must meet in the marketing and selling of their homes and with their after-sales customer service. Code requirement 1.2: states that house builders are required to display the Code and give, without charge, a copy to any customers who ask for it and to every buyer reserving a home.


Ensure you get a copy  of the Code and read it thoroughly BEFORE reserving a new home!


House builders and Estate Agents must not be misleading or withhold relevant information

Property Misdescription (Specified Matters) Order 1992

It is a criminal offence to make false or misleading statements either verbal, written or by pictures. Individuals as well as companies can be fined for each breach of these regulations. It is prudent to take notes listing all relevant points and answers to your questions and ask the sales person to sign to signify that  what they have said is true.


Many of the larger developers have a procedure where you, the purchaser, sign a standard form listing everything you have seen or been informed about the property being offered for sale, including site layouts and drawings. This is good practice and a safeguard for both parties. Property Misdescriptions Guidance Notes for more information.


Whilst there was no general requirement under the Act to disclose information to consumers, the new Consumer Protection from Unfair Trading Regulations 2008 now prohibits omitting material information from consumers, if that omission might cause the consumer to take a different decision. For more on the Consumer Protection from Unfair Trading Regulations 2008 and the Business Protection from Misleading Marketing Regulations 2008.










Discounts

Developers, especially the larger national Plc. house builders, are always ready to give a discount. Their site sales advisors have a 'margin' within which they can negotiate the price you pay. This can be done using "free extras" such as carpets, turfed rear garden, specification upgrades or a cash discount off the original price or perhaps a combination. The amount of discount or ‘incentive’ available is typically 3% to 4% but this can be much more, depending on factors such as timing of the builder’s end of year date and whether the particular property is a "stock" (finished) property. In such cases discounts can be very generous. Many of the 'buy to let' investors are aware of this timing and get the best discounts they can, often negotiating up to 25% off each property by purchasing several properties in one deal. These days, only a complete fool will pay the price on the price list! If you cannot get a discount walk away.


Reservation fee

Is this amount included as a contribution or part payment towards the cost of your new home? Let your solicitor know how much you have paid.


Part-exchange policy

Again most of the larger developers will have a part-exchange policy where you can 'trade-in' the value of your existing home against the price of the new home. However, whilst this has the advantage of saving you both the hassle and added expense of selling your existing home yourself, the builders know this and many will only give you 90 to 95% of any valuation on your existing home. In addition, most part-exchange deals restrict or take away the possibility to negotiate a discount. Another factor to consider is that to qualify for a part-exchange, you must be trading up to a higher priced property, usually 30% more than the value of your existing home.


Is the property Leasehold?

Most of the large national housebuilders are now selling new houses as leasehold to unsuspecting new homebuyers. A third of the houses built by Persimmon between 2013 and 2015 are leasehold. According to government figures, around 6,000 new houses were sold as leasehold in 2015. Leasehold new houses should be avoided altogether. There is no reason at all why a house cannot be sold on a freehold basis so walk away from any leasehold new houses.


How are the new properties selling

Look at the site plan to see how many homes have sold. Ask the sales advisor how long they have been on site. Remember that some may have been early reservations purchased 'off-plan'. It is also not unknown for builders to put 'Sold' or 'Reserved' signs in the windows of several plots to give you the impression that the development is selling well. Sometimes these are the social housing properties, which have been technically 'sold'. Others are phantom sales which can often mysteriously "fall through" a few days after you have expressed an interest.


Mortgage broker tie-ins

Don’t be pushed into seeing the builder’s recommended mortgage broker. They can give the builder and sometimes the sales advisor, a share of their commission for each referral resulting in a mortgage. It will not cost you anything to use the builder’s broker, but if you do, negotiate with him to get a share of his commission, or again, walk away. Remember he needs your business and there is enough commission for everyone.


Using the builder's choice of solicitor

Never ever use any firm of solicitors suggested or recommended by the house builder. Find out why here This is one of the worst mistakes a new home buyer can make.


End of year figures date

This is the most critical thing you need to find out, especially for the large national Plc. builders. To find out more End of year figures.


Is the road being conveyed to the County Council

This is an important consideration if you don't want to find yourself with maintenance charges for the upkeep of the estate roads. Most roads on new developments used to be covered by a Section 38 Agreement with the County Council. But it is now becoming increasingly common on new housing developments for roads and other public areas to remain privately owned, with all home owners being responsible for the maintenance, repair and insurance via an annual management charge typically starting at around £200 to £300 a year. It is possible to buy a new home, often from the same housebuilder on another nearby development, where roads and public areas are being adopted on completion by the Local Authority, thereby avoiding an ongoing ever-increasing, annual management charge. If the sales advisor does not know, make sure you make it a condition if you reserve and ask your Solicitor to find out!


Floor areas

Ask for the floor areas of the properties you are interested in. This will give you an idea of value for money between different types, in cost per square foot or metre. It will also give you a quick way of calculating carpeting costs, which will show you the true value of the carpet deal being offered. Better still; ask if you can have a copy of the builder’s working drawing (ground and first floor plans). It is unlikely you will be given this but it is worth asking.


What upgrades or extras are available

Many builders and developers offer "upgrades" or "extras" under various names. On reservation it is better to find out what is on offer and how much these are likely to cost. You could even get them at no cost, as an “incentive” to buy. Be aware that the builders charge considerably more for extras than it would cost if you arranged the work yourself.


What choices/selections are available

Nearly all builders give prospective purchasers a choice of kitchen units, worktops and wall and floor tiling. If you have any particular preferences it is worth asking if these could be accommodated during the building process. Customisation of a new home could also include choice of decoration colours, internal doors, sanitary ware, etc. In fact you may be able to personalise anything on some developments, but be aware this may come at a cost. This could also be limited by the current stage of construction of your home.


Specifications that are included as standard

The builder should be able to provide a list of the 'standard' specification. It is important to know what you are actually buying. The quantity of wall tiling and floor tiling. The inclusion of kitchen appliances, their type and manufacturer. Burglar alarm if any. Type and manufacturer of electrical equipment, heating system, type of windows, fencing etc. If you want to know anything ASK.


When is my new home due to be fully completed

On reservation, it should be possible for the sales advisor to give you an approximate date when the property is due to be finished. This is not “cast in stone” and will be subject to weather and other delays that the builder has no control over. However always get a date and keep visiting the development to see how your new home is progressing. This is especially critical if you have sold your existing home and are at the head of a 'chain'.


When is the development due to be completed

This will give you an indication of how long you will have to tolerate living on a building site, with unfinished roads, heavy lorries, mud, dirt, dust and noise to contend with.


Where are the Social or Affordable Housing properties

These should be clearly indicated on the site plan and in the sales brochure. If they are not, (they should be!) ask which properties are allocated for social and/or affordable housing.


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