When do you pay a house deposit on a new build

[Kay2705]

Hi all,

Just in the process of looking at new build houses to see what we can get. I am a bit confused though as when we would pay the deposit. The house isn't due to be completed till summer 2019. Would we sort it out and pay now or pay when the house has been completed?

We are in the process of viewing so not quite far in the legal process.

Thank you

Normally there's a reservation fee of about £500 which you pay on the day you decide you want the house. The deposit is paid when you exchange, which the developers like to get done within a month or two of you reserving the property.

Our new build we paid £1000 reservation then the deposit at exchange. I never actually saw that money as it came from the sale of my house. Our new build was built and ready to move into (just needed flooring fitted) when we viewed it so not sure if it changes if you are waiting for one to be actually built.

And yes builder wanted completion within 2 months of putting down reservation - sale was proceeding on my house but it was a bit of an anxious time as you always worry your buyer will pull out.

Thank you everyone. So the sale and exchange of contract is done before the house is completed?

You seem to be able to exchange and pay deposit when you like then complete when it's ready. Ours are giving us 5 days notice for completion when the lift for the flats is fully operational. That's a clause we wanted.

Normally you pay the deposit on exchange which most developers like you to do within 30 days. However with mine they let us exchange on 5k then pay the rest at completion as we didn't have the full deposit ready

Thanks @Lantern92 ! This might be a good plan as we almost have all our deposit but if we were to reserve and complete the exchange straight away we wouldn't have the full deposit but we can get some help from family

We actually exchanged on no deposit in the end, or rather on the £10k the builder was gifting us. But yeah, exchange happens within a certain time from reservation regardless of whether the house is built yet. So you'll exchange without a completion date but the contract should state how much notice you'll be given for completion.

@Kay2705 yeah we didn't realise they could do this until they offered it. But we went with a smaller 5 star homebuilder- not sure if the persimmon/ Taylor wimpey type builders would offer. But it helped us out massively !