A new build property is a great option for first time buyers willing to wait to move into their new home.
They have lower maintenance costs (including 10-year building insurance), are energy efficient, and offer a ready-made home that needs no renovation or decoration once you’ve moved in. New builds also usually have first time buyer schemes, such as shared ownership, to encourage new homeowners onto their sites.
Here’s your quick guide to understanding why a new build property could be the perfect option for you as a first time buyer.
New builds let you choose the finishing touches
Sometimes, you’ll buy a new build property once it’s already completed. If, however, you see a show home before the rest of the site is finished, you have the opportunity to buy ‘off-plan’.
This means you get to choose your kitchen appliances, décor colours, carpets – the lot! You’ll often have a choice about your exterior, too, such as choosing between turf or a patio and decking for your back garden.
This helps you personalise your home without doing any of the hard work yourself. New builds created in this way also mean you often make huge savings on appliances and finishing touches. The property developer can buy in bulk – and passes these savings to you.
First time buyer scheme favour new build properties
New housing developments offer incentives for first time buyers. The Help to Buy Equity Loan scheme allows you to put down a 5% deposit and the government lends you up to 20% of the newly built property price (40% if buying a property in London). The equity loan is interest-free for the first five years and a 75% mortgage makes up the rest.
There are other schemes, such as shared ownership that helps first time buyers afford new build properties with ease. You may also find that a Lifetime ISA (LISA) offers similar benefits to the now-closed Help to Buy ISA scheme, too.
Your local mortgage adviser can talk you through the mortgage options related to first time buyer schemes, to help you decide which is the best route for your circumstances.
Top-notch building regulations mean a safe home
New builds must adhere to strict building regulations. They also come with ‘snagging clauses’ – this means any issues caused by the quality of the building work after you move in must be fixed by the contractor.
Compare this situation to buying an older property. You’ll need additional surveys, have to hire contractors for re-wiring, damp-proofing or insulation, and spend a lot of money on maintaining worn exteriors and interiors. Whereas a new build has none of these associated costs.
How to buy a new build property
New build properties attract first time buyers for the ease of maintenance, high-quality building work, and even the sense of community. Everyone buying a home on the new development will be in the same ‘new to the area’ position – and the layout of developments make it easy to get to know your neighbours.
As a first time buyer, either as a professional or as you’re starting to grow your family, this sense of a new community, with neighbours in similar life stages, is highly appealing.
So, if you want to take advantage of these benefits, how do you buy a new build property?
Find your perfect property
Take a look around areas you’d like to live in. Some may already have developments in progress – but it’s also worth checking the local authority planning permission portal for future developments too. This is particularly useful if you’re at the very start of your house-buying journey and still need more time to save your deposit.
Visit show homes on the new developments to get a feel for the style of the home available.
Find out if a first time buyer scheme is offered
Research existing and proposed new build developments in the areas you’d like to live. You don’t need to wait for the houses to be built to apply to live there.
Ask if first time buyer schemes or incentives are offered by the property developer or in partnership with the local authority. This may be a shared ownership scheme or a different type of incentive. In the past, some developers partnered with lenders to offer a ‘one-year mortgage-free’ scheme to allow new buyers breathing space before starting repayments.
Decide on your mortgage options
Whether you’re buying with a straightforward mortgage, as part of a shared ownership scheme, or as a LISA scheme buyer, it’s worth speaking to your mortgage adviser first.
They’ll offer advice on deals suitable for your needs. That includes offers and rates that aren’t available to you directly. Your adviser will also help you negotiate your Agreement in Principle and other paperwork required to meet mortgage eligibility requirements for new builds.
Make an offer
When you’ve got an Agreement in Principle, you can then make an offer.
This is the fun part. If you’re buying off-plan, you get to choose the finishing touches to your new home. Take your time to plan what you’d like, and to create a budget for the more luxurious finishes you might want to include.
Be prepared to wait for moving day
Your final step is to wait for your house to be built. The waiting game is a little tedious – but it gives you more time to save plenty of money to pay off your mortgage and add to your moving funds.
You’ll often exchange contracts months earlier than a moving date for a new build. You’ll need your deposit in place, then well before you complete the purchase. However, the extra months between exchange and completion give you plenty of time to save money for your mortgage payments, new furniture, and other moving costs.
Discover more about getting a mortgage for a new build property
Some mortgage lenders have restrictions about new build property mortgages, while others may not offer deals for shared ownership schemes.
The best way to find out which route suits your circumstances is to have a chat with your local mortgage expert in Newcastle. Contact us here or call us on 0191 4018229 to book an appointment today.