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We offer expert advice and guidance throughout the process, but we also have access to the whole market so we can help you secure the best deal.
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A property is generally considered to be a ‘New Build’ if it’s been built within the past two years and hasn’t been lived in by anyone yet. If you’re buying a property which is in the process of being built, or where work hasn’t yet started on the land, it’s known as buying ‘off plan’ and is also considered a ‘New Build’.
Most mortgage lenders will have slightly different rules for New Builds and the process can be a little more complex. Limits on how much they’ll lend or what deposit they’ll accept will usually vary from their standard mortgage deals.
The mortgage itself works in the same way as any standard residential mortgage and lenders will consider your eligibility in the same way, assessing your income, your credit history and affordability.
The mortgage often includes features tailored to the process of buying a new home. For example, Mortgage Offers for New Build mortgages are typically valid for longer periods than standard residential mortgages. This is to allow for the process taking longer, as is often the case when buying a New Build, especially if you’re buying off plan.
To secure a New Build property you’ll be required to put down a reservation fee. It’s common the developer will require you to exchange contracts within a specified timescale from the date you reserve a property. So, you’ll need to apply for your mortgage as quickly as possible. Meeting this deadline can be challenging – our knowledge of the market and our relationships with lenders can be very valuable at this stage.
As with any property purchase, you’ll start paying your mortgage once the property purchase completes. Completion is usually set for when the property is ready to move in to.
We can explore your eligibility for home-buying schemes such as Shared Ownership or Own New, that could make buying a new build achievable for you.
Our advisors will research the mortgage market, based on your deposit, your timeline, your budget and any other relevant information. We’ll work out how much you can borrow and compare the options available to you. We may have access to deals that you won’t find on the high street.
Developers often offer incentives, such as paying your stamp duty or legal fees. Lenders will take these incentives into account when considering how much to lend you. If it has an impact on how much you’re borrowing in relation to the property value (known as the loan to value, or LTV), this could affect the deals you’re eligible for.
Mortgage Offers have expiration dates and, although New Build Mortgage offers are typically valid for longer, it’s common for developments to take longer than expected. Our experienced advisors will consider this when recommending a suitable mortgage and, in such instances, will liaise with your lender to find a solution.
We’ll communicate and work closely with all parties, including the developer and solicitors to help make the journey as smooth and stress-free as possible for you.
New build properties are generally much more energy efficient than older properties.
To comply with stricter modern building regulations developers/ builders must ensure the properties insulation, windows, heating systems etc meet the standards set.
It’s common to buy new builds directly from the developer/ builder, so it’s important to do some research into their reputation. Here are some website’s that you can use as a starting point for your research:
National Customer Satisfaction Survey and HBF Star Rating
HomeViews | Find your new home with verified resident reviews
It’s a good idea to check out what other similar properties in the area have sold for recently. Compare what other similar properties are being marketed for. Are properties in the area struggling to sell? There may be some room for negotiation on the advertised price, or the inclusion of other financial incentives, such as the developer paying your stamp duty or legal fees.
Developers will often recommend that you use a solicitor from their panel, but you shouldn’t feel pressured to. There can be benefits to using a solicitor that’s familiar with the developer, but it’s entirely your choice. It’s always worth doing some research and comparing reviews as well as prices as they can vary drastically.
Management fees (also known as Service Charges) are usually charged for the maintenance and upkeep of communal areas, such as hallways, lifts and roads. These are most common for leasehold properties, but can be charged for freehold properties too.
Ground rent is a regular fee charged to leaseholders by the freeholder. Recent changes in the law mean that this should be less common these days, but it’s still worth checking
It’s important to ask for information on all related charges or fees before you reserve a new build property as mortgage lenders will take these into account when considering how much they will lend you.
Read your agreement carefully. Make sure that there is confirmation of what’s included in the purchase price in your Reservation Agreement. For example, the properties parking arrangements, any other fees you’ll be responsible for, agreed incentives – such as the payment of Stamp Duty, or the inclusion of fittings such as carpets or white goods.
Most developers offer a ‘cooling-off’ period once you’ve paid your reservation fee, during which you can pull out of the planned purchase and get some or all of your money back. The length of the cooling off period and terms of receiving a refund vary, so check this before putting down any reservation fee.
Initial chat Have a free no-obligation chat with one of our advisors.
Full consultation After an initial chat, if you’d like to arrange a full consultation, our advisor will book a Fact Find meeting. This will be arranged when and where is convenient – your home, our office, or on a video call. You can invite family members or trusted friends to join if you like.
Provide documentation Your PSG advisor will explain what ID and supporting documents they will need from you.
Fact find meeting They will chat through your circumstances and aspirations, to identify and understand your needs and potential risks to your income.
Options presentation Next, they will share suitable mortgage and personal protection options and make their recommendations. Once you’ve considered the options, if you’d like to instruct us to proceed, we’ll take it from there.
Decision in Principle (DIP) Your advisor will submit an application to your chosen lender. You’ll receive a certificate or statement to say that, in principle, they’re willing to lend you the amount stated. This can be provided to a developer to support an offer.
Find a property If you haven’t already, you’re in good, informed position to start looking.
Discuss price and incentives Speak to the developer, then check in with your advisor to be sure you can afford the final price.
Pay Reservation Fee Give your mortgage advisor the completed reservation form.
Instruct a solicitor We’re happy to help with this. However, your developer may have a preferred solicitor
Property valuation Your lender will instruct a mortgage valuation to be carried out. They’ll arrange this directly with the developer.
Mortgage Offer Once satisfied that your application, documents and valuation meet their criteria, your developer will issue your mortgage offer.
Property checks and searches The lender will provide your solicitor with a copy of your mortgage offer. Your solicitor will carry out all of the checks and searches on the property or development and report to you directly.
Plan exchange and completion dates Once your solicitor has completed the necessary searches and checks they’ll liaise with you and the developer’s solicitor to agree exchange and completion dates.
Exchange of Contracts Your solicitor and the developer’s solicitor will swap signed contracts, making the sale agreement legally binding. This is typically 28 days after having your offer accepted on a new build property.
Completion This signifies the final stage, when the building is finished, signed off and ownership of the property is transferred to you. It’s the day the full purchase price is transferred, the developer’s solicitor confirms receipt and you can officially take possession and pick up the keys!
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