Owning a new build home is certainly attractive to many people. Poor insulation, subsidence, crumbling walls with ten layers of paint, lead water pipes: all of these are things of the past in new build houses. Maintenance costs are lower, and new build houses should also be provided with a 10-year guarantee from the National House Building Council. New Build homes should be energy-efficient, space-efficient and able to be personalised entirely to the homebuyers’ tastes.
However, not all new builds have these advantages. Before buying a new build house, prospective buyers should check on build quality, energy-efficiency, light-efficiency and security. Buyers should not assume that because the house is new build they do not need a survey – surveys can save homebuyers money both on the deal and in the future if there are problems.
Mortgage options for new-build houses
There are a variety of finance options for new build houses. For instance, shared equity or ‘equity appreciation’ can be a possibility. In this instance, the developer shares the appreciation of value in the property. Other flexible options exist include extra incentives on new build homes, such as deposit paid by developer. Shared ownership with a local authority or developer may also be an option. If the property is suitable security for a mortgage, then lenders may be interested, particularly if the developers are offering discounts. However, not all lenders will accept a builder’s deposit.
With new-build it is also worth remembering completion deadlines. If your home is unfinished and looks like it may run over deadline, bear in mind that most lenders’ offers will only last for a six-month period. Some lenders offer specific loans for people looking to buy new build properties, some of which extend the mortgage offer from 6 months to twelve months.
Typically this type of specific loan can be tailored to the needs of the client, and new build exclusives such as builder incentives can be factored in.