Buying a new build house follows the same legal steps as any purchase, with a few extra stages: a reservation, a build that may not be finished when you exchange, and a chance to inspect the home before you complete. This guide takes them in order, from choosing a home to moving in.
It is general information, not legal or financial advice. A solicitor or licensed conveyancer, and a mortgage adviser, can tell you how each step applies to you.
How do you choose a new build home and development?
Start with the location, the house type and the plot, then ask the developer the practical questions: when the home should be finished, which warranty covers it, whether there are estate management charges, and which consumer code the developer is registered with.
Under the New Homes Quality Code, a developer’s marketing must include estimated legal completion dates, the warranty that applies and any management or service charges, so you should not have to dig for them. GOV.UK points out that you may be buying off plan, before the home is built, so look at the plans and specification as closely as the show home.
What happens when you reserve a new build?
You pay a reservation fee and sign a reservation agreement, and the developer holds that home for you while the sale goes through. GOV.UK notes that a reservation fee may only be refundable in certain circumstances, so read the agreement before you pay.
GOV.UK also says that many developers ask you to exchange contracts and pay a deposit shortly after reserving, so have your solicitor and mortgage lined up before you reserve.
What does a reservation agreement cover?
It records the home, the price, the fee, how long the reservation lasts and the terms for cancelling. The detail depends on which code the developer follows, so ask which one applies and read the agreement before you sign it.
Under the New Homes Quality Code, the agreement must set out, among other things:
- the reservation fee and any deductions if you cancel after the cooling off period
- a cooling off period of at least 14 days, during which you can cancel for any reason and get the full fee back
- the price and how long the price and the agreement are valid
- the warranty provider
- a date for exchange of contracts, which under that Code is at least six weeks after you reserve unless you ask for an earlier one
- an estimate of yearly management costs
The same Code says the developer cannot cancel the reservation while the agreement is still valid.
When should you instruct a solicitor and arrange a mortgage?
As soon as you reserve, because the timetable to exchange can be short. GOV.UK advises instructing a legal representative as soon as your offer is accepted, and making your full mortgage application at that point too.
A lender’s decision in principle, a written estimate of what it may lend you, is worth having before you reserve. GOV.UK reminds buyers that a mortgage valuation is not a survey. Developers sometimes suggest solicitors or mortgage brokers, but GOV.UK says you are under no obligation to use them.
If the home is not built yet, tell your solicitor and mortgage adviser the expected completion date early, so they can plan around it.
What happens at exchange of contracts?
Exchange makes the purchase legally binding, and you usually pay your deposit at this point. GOV.UK warns that if you pull out after exchange you may lose your deposit and have to pay compensation, so make sure everything is settled first.
Before exchange, your solicitor should check the contract and the documents the developer provides. Under the New Homes Quality Code, these include the reservation agreement, a summary of the warranty cover, the specification and the expected completion date. The contract should also say how much notice you will get of completion and what happens if the home is not ready. The new build warranty guide explains what a warranty covers, including the deposit protection some policies give between exchange and completion.
How long does the build take after you exchange?
It depends on how far the home has got when you exchange. The developer gives an expected completion date, then a formal notice to complete once the home is ready. Ask your solicitor whether the contract has a long stop date.
GOV.UK explains that a long stop date can be written into the contract so you can withdraw if there are long delays. Under the New Homes Quality Code, the notice to complete is usually expected to be at least 14 calendar days, and the developer must tell you in writing about any major change to the home. If you cancel within 14 days of receiving those details, that Code gives you a full refund.
What happens at completion and moving in?
On completion day your solicitor sends the money, the home becomes yours and you collect the keys. Afterwards your solicitor registers you as the owner with HM Land Registry, and you should receive your warranty documents.
The New Homes Quality Code requires the developer to give you a home demonstration, a schedule of any incomplete work, a copy of its complaints procedure and your warranty documents at completion. NHBC says your insurance certificate and policy booklet should reach you from your conveyancer before you move in, and to contact the conveyancer if they have not arrived within four weeks.
For council tax once you move in, see council tax on new builds.
What is new build snagging?
Snagging means finding and fixing small defects and unfinished work in a new home, such as a sticking door or a scuffed skirting board. The best time to find them is a pre-completion inspection, before you hand over the money.
GOV.UK describes snagging issues as defects or unfinished pieces of work, and suggests agreeing at exchange that a snagging survey will be done once the home is built and before completion. Both the New Homes Quality Code and the Consumer Code for New Homes give you the opportunity of a pre-completion inspection. Under the New Homes Quality Code it takes place after the notice to complete and before completion, and you can do it yourself or appoint a suitably qualified inspector.
Who do you report snags and defects to?
The developer, in writing, as soon as you find them. In the first two years the builder is responsible for putting right defects, and the warranty provider only steps in if the builder does not.
NHBC advises contacting the builder as soon as you reasonably can and keeping a record of what you reported, to whom and when. If the builder fails to act after going through its complaints process, NHBC may be able to help through its resolution service. The New Homes Quality Code requires an after sales service for at least two years after completion, and says most issues should be settled within 30 days. The Consumer Code for New Homes excludes snags that were not reported within the developer’s stated timescale from its dispute scheme, so do not sit on them.
After the first two years, defects in the structure become a matter for the warranty provider, which the new build warranty guide covers.
What protects you when you buy a new build?
A structural warranty, and the consumer code your developer is registered with. There are three main codes, each with its own rules and independent dispute resolution, so ask which one applies before you reserve.
- The New Homes Quality Code is run by the New Homes Quality Board. If a complaint is not resolved, you can refer it to the New Homes Ombudsman Service 56 days after the complaint start date.
- The Consumer Code for New Homes is mandatory for developers registered with it and covers the sale from the pre-contract stage until two years after completion, with free dispute resolution through CEDR. Our page on the Consumer Code for New Homes explains what it covers.
- The Consumer Code for Home Builders has operated since 2010, applies to most homes covered by NHBC, Premier Guarantee, LABC Warranty and Checkmate, and protects buyers from reservation until two years after legal completion.
They are separate schemes with different rules, so read the one that applies to your home rather than assuming they work the same way.
Can you part exchange your current home?
Some developers offer part exchange, where they buy your current home so you do not depend on a chain. At Beau it is arranged through a specialist provider: how part exchange on a new build works explains the process.
Frequently asked questions
It depends on the agreement and the code your developer follows. Under the New Homes Quality Code you get the full fee back if you cancel within the cooling off period of at least 14 days, and after that the fee less any deductions set out in the agreement.
No. GOV.UK says you are under no obligation to use firms a developer refers you to. Choose a solicitor or licensed conveyancer you are happy with.
Usually, yes. The New Homes Quality Code and the Consumer Code for New Homes both give buyers the opportunity of a pre-completion inspection, and GOV.UK suggests agreeing a snagging survey at exchange. You can do it yourself or pay a qualified inspector.
Your contract sets that out, so ask your solicitor to check it before exchange. GOV.UK explains that a long stop date can let you withdraw after long delays, and the New Homes Quality Code requires the contract to say what happens if the home is not ready.
The codes set expectations rather than one deadline for every case. The New Homes Quality Code says most after sales issues should be settled within 30 days, and in the first two years the builder is responsible for putting right defects.
Looking for a new build home?
Browse Beau Property new build houses to see what we are building, or get in touch to ask about a home.
