New Build Property Guide
To try and tackle the national shortage of property, the government is placing a big focus on new-build homes at the moment, pledging to build one million more in the next five years.
Buying a new build is a little different to buying an existing property and there are lot of matters to take into consideration. To help address some of the main areas we have summarised some main points below.
New Builds and the National House Building Council (NHBC) certificate
You will need a NHBC certificate, which proves that new builds are built to an approved standard by the developer and comes with a maximum of 10 years guarantee. If you do not have the above, an architect certificate will suffice and we ensure that the certificate issued- or the equivalent meets criteria and will be accepted by all other lenders.
New Builds and the Section 38 agreement
The section 38 agreement involves the developer and Local Authority. The agreement ensures that the roads are developed to the correct standard, so that the Local Authority is able to adopt the road once finished. At the time that our client is buying a property, we will ensure that the roads will be completed at some stage.
New Builds and the Section 104 Agreement
The section 104 agreement works similar to section 38 but takes into consideration the drains of the development and involves the developer and Water Authority.
Other areas to take into consideration with new builds:
Private roads and drains – in some cases the developer will not enter into agreements and then it will be the buyer’s responsibility to maintain roads and drains following completion. In this case, we will need to ensure that the developer can insure against the risk of them going bankrupt before the roads and drains are 100% completed.
Freehold managing agents – recently, there has been a trend where developers will set up management companies that all the residents of the estate will join, in order to maintain communal areas. There is an annual service charge that residents will be expected to pay.
Exchange on notice – even though this is rare, there has been occasions where on exchange the property may not be 100% built. Once we are satisfied with all documents provided and ready, we will only exchange on the condition that as soon as the build has finished they will service notice and give us 14 days to complete.
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The information contained in this article does not constitute financial advice or recommendation and should not be considered as such. Arrow conveyancing does not offer financial advice and is not regulated by the Financial Conduct Authority (FCA), the authors of this article are not financial advisors and are therefore not authorised to offer financial advice.