Between characterful period flats and shiny new builds with brand new fixtures, it can be hard to know what the best bet is on the London market.
On the other hand, build delays are not uncommon, nor are snagging issues, and there have been reports of discrepancies between show homes and the finished product. So what should you be looking for when buying a new build? And what should you avoid?
It starts with the developer. Can you trust what they’re showing you before your flat has been built? Hannah McEwen, Money Editor at MoneySavingExpert, says: “Always do some digging on the developer — make sure it’s signed up to a code of standards and check reviews online.”
The New Homes Quality Board (NHQB) and its sister New Homes Ombudsman Service (NHOS) were introduced in 2022 to improve the quality of new builds and increase protection for buyers. They have created an increased focus on transparency for housebuilders, but not all builders are registered with them and committed to following their rules.
Check if your builder is registered with the ombudsman service. The NHQB also suggests checking reviews on housebuilder websites, consumer websites and Trustpilot, as well as the National New Homes Customer Satisfaction Survey.
You should ask your housebuilder questions about the fees you might be expected to pay, because payment structures can be complicated. “Ask detailed questions about tenure (freehold/leasehold), ground rent, service charges, management fees, and future liabilities,” the NHOS says.
In terms of service fees, McEwan says: “Check how much they are, what they cover, and how much they can increase by. Excessive fees can cost £1,000s — eating into your budget and making a home harder to sell.”
Is what the fees cover important enough to you to be spending money on? And will you have enough wiggle room in your monthly budget if they increase? Remember, though, that if your service fees will eventually cover repairs, that might be a more predictable way to manage expenses than needing to pay for repairs outright in an older home.
“If the value of homes isn’t going up fast, whether we’re buying a new home or not a new home, we’ve all got to start thinking more about running costs and repairs and maintenance and big things that might need to happen to a property, and that applies just as much to an old house as a new build,” Richard Donnell, Executive Director for Research at Zoopla says.
Ask about the wider development
Think about the wider development too, not just your flat. “The trend at the moment in London is very large schemes where there’s almost a whole new community created within what existed before,” according to Donnell. So, he says, you should think about whether the goods and services you need are going to be reachable.
The NHOS points out: “If there are key things that matter to you then put them in writing to the developer — e.g. the developer has promised a playground will be nearby (or promised one won’t be nearby, if that’s what is important); or there will be a footpath, or turning circle — whatever you have relied upon in making your decision to buy that particular house.”
Negotiate based on the local market
It can be difficult to negotiate with a developer when your flat isn’t built yet, especially when you don’t know what issues it might have once you move in. It’s safer to ask for as much as you can up front based on what you know the flat will or won’t have compared to others in the local area for a similar price.
“You’ve got to make sure that you’re maxing out on whatever incentives they’ve got,” Donnell says. “There’s a simple rule of thumb that a lender will allow them to give five per cent of the value of the property as incentives. So that could be paying for your stamp duty. It could be paying towards your legal costs. It could be other incentives.”
It’s fairly common with large building projects — just like with any construction project — to experience delays. This can be frustrating and make it difficult to plan for your move. Be realistic and try to put plans in place for different scenarios.
Firstly, try to get a sense of a developer’s past timelines. “Ask the sales people about the track record and if there’s a number of phases, how many were late, how many are on time,” says Donnell.
Be aware, too, that mortgage offers can be time limited, so your initial one might run out. Be open and up front from the beginning with your bank and you should be ok, Donnell says. “I think banks are pretty flexible in supporting people with mortgages and if there’s no fault of the borrower, a bank, at their discretion, could probably roll (mortgage offers) forward.”
McEwan urges some caution: “Some lenders are cautious or ask for bigger deposits. If you have problems, it might be worth consulting a mortgage broker — they’ll have information about which lenders are most flexible when it comes to new builds.”
Be thorough when it comes to snagging
Snagging is the process of finding minor issues with a new home that you might only spot once you’ve moved in. It’s one of the major “headaches” when it comes to new builds, says McEwan, but there are things you can do. “Draw up a snagging list as soon as possible, or hire a professional snagging inspector, though you’ll have to pay for this.”
The NHQB points out that housebuilders registered with them must offer buyers the opportunity to undertake a pre-completion inspection.
The Ombudsman service says: “You are entitled to carry out your own inspection, or appoint a qualified inspector (many buyers use snagging surveyors). The developer must give reasonable access before handover. Expect some issues and snags — that’s normal, houses are complex, but the developer should deal with them in a timely manner.”
The NHOS also suggests creating a detailed list. “Record all visible defects (cosmetic and functional). Use photos and written notes. Report snags in writing to the developer as soon as possible (keep copies). Follow up if needed, but also ensure you work collaboratively with the developer, allowing access as needed etc.”