New Builds

[Cominghomesoon]

Within the next couple of years we are looking to sell our London house and move nearer to our children in the Midlands (one of whom is hoping to buy a new build on a development). The idea is to split our time between UK and our property overseas. When buying a new build, do you make an offer on a property? Ask for upgrades? What questions should we be asking? I am clueless! Any advice would be appreciated. Thank you.

You don’t really get to make an offer, they are very unlikely to change the price as they devalues all the other plots.

You can ask for financial incentives, this can be things like 5% deposit contribution, stamp duty and legal fees paid and also upgrades like free flooring, built in wardrobes, spot lights, kitchen upgrades etc.

How much you will get depends on how far into the build they are (usually earlier they are, less incentives but further along, less choice of fittings), how popular the specific plot is and sometimes even what point of the financial year they are in (if they have sales targets to meet, they will budge more).

Ask if there’s any management fees (otherwise known as “fleecehold”):

https://hoa.org.uk/advice/guides-for-homeowners/for-owners/problems-new-build-estate-management-fees/

No info other than make sure you pay a third party for a thorough snag list. New properties are notorious for lazy workmanship and cheap fixes. I’ve seen some videos on TikTok and wouldn’t even consider without one.

Important to avoid the new builds with "estate management fees".
They are already becoming hard to shift second hand - unless priced low. In my area the developers are also having problems shifting them new and have started offering cash back deals.
Advise your children to really look carefully at true full freehold homes. They make better financial sense imo.

You should have the property professionally snagged before moving in. These companies will tell you what building regulations have been broken and need to be fixed, as well as any numerous faults that the builder should rectify. See YT for snagging.

Thank you! There are many things that we have to pick through.

Also, don't believe all the "new builds are crap" stuff - we bought a new build from a small builder and the build quality is excellent, very little "snagging" which was rectified immediately and he did negotiate on the price. There are good developers out there!

Yes you can make offers on a new build. When we were looking around a year ago we made offers with several different developers and all of them would accept an offer even if it was as cash back, moving costs, upgrades or a combination. However we were a cash buyer so was in a really good position.

You are unlikely to be successful making an offer but you may get incentives or upgrades.
The earlier through the build process you exchange, the more upgrades/options that will be available to you (we exchanged 12-months before completion, watched the house being built and had free reign from the options list).
Don't believe all the NB horror stories or lazy comments about all NB's being tiny, made of cardboard etc. If you choose & buy wisely there are lots of well designed, well built & spacious houses out there.
People often quote parking as a significant problem but TBH this can apply to older properties just as much as with these, you research and buy a property that has sufficient parking for the number of people living there plus visitors.
The"fleecehold" stories can get a bit out of hand. I believe the leasehold situation is now resolved and new houses have to be sold as freehold (check this first) but there is often an estate management fee. This seems wrong to me (you don't get any corresponding reduction in your CT) but it is what it is and as long as they are reasonable it is nothing more than an annoyance (ours are £160/pa).

The other thing to note is that the council tax band will typically be greater than an "equivalent" older property in town - despite usually being a smaller plot, further from amenities and also having to pay estate management fees to do things that the council does for older properties.

Yes I've noticed that too. Seems quite unfair - but councils dont seem to be able to live within their means - so its an opportunity to recoup funds to put towards "social care". I guess the logic is that if you can afford to buy a brand new house, you can afford to contribute more, for less. We are very good at that kind of thinking in the UK...

I worked in sales for a property developer. I would say that the majority of the time offers aren’t accepted. However, this can depend on the property, the whole development that’s being built and the buyers position. Eg if it’s the last property on a new development and the others are all sold then they may be more likely to accept an offer as they’ll want to sell the property quickly. If you’re a cash buyer then there may be a little wriggle room, again depending on the popularity of the development.
We had one development that wasn’t in a hugely desirable location and so eventually some offers were accepted rather than the asking price. Another development was in a really popular area and all of the properties were sold ages before the build was completed, so there was no incentive to accept any offers.
Big thing though - make sure any property developer you buy from is covered by the NHBC/ Buildmark guarantee. It’s basically an insurance / set of standards they have to follow. So your new build home should be a very good standard. Also means you get 10 years cover - the first 2 years any issues will be fixed by the developer /builder and the remaining 8 years are covered by the NHBC and sorted through that. To hold this the developer has to continuously meet certain standards. I wouldn’t buy from anyone who isn’t part of this.

Most people were borrowing at low rates for expensive new-builds, they can"t afford any more council tax than the next person especially since their mortgage went up, that is why new-build sales are down about 60%, increased borrowing rates has put the developers in a right old pickle.

totally agree. Our house needed all the rendering taken off and re rendered. We had 9 and half months left of the 10 year NHBC warranty. They agreed to do the work. Wouldnt buy a new build unless it had the NHBC Warranty

I think we looked at around 15 different developers, some big and some small, and most considered offers and they were fairly substantial. Ask in a nice but firm way. They can only say no. Also remember you are dealing with sales so don’t accept their ‘no’, ask them to put it to the developer. Ask about management fees. Ask about what roads will be adopted. Ask when development will complete and how many phases if it’s a large developer. Ask what gurantee they give. Ask what the construction is (brick and block, timber frame, other and then google pros and cons). Ask what fittings are standard and what are upgrades. Look at driveways and check you can get your car in (some were a joke).

Yes I think your right. Several of the large developers have recently stated they will not buy more land at the moment - and in some cases are halting proceeding on unstarted planned sites. They only ever do this when they see the market values are slipping. Your point about that being due to affordability changes is also correct. They do like a chunky profit margin - and if that looks to going to reduce too much they reign in to try and influence government by restraining supply. This has been the case for decades.
In this instance though I dont think they can influence anything. The Government's tool box is well and truly empty. Prices will have to adjust.

The PM is about to be forced out, I think that will drive up UK borrowing costs.

I am currently buying a new build, moving from Surrey to the North West. You don’t make an offer as such, but the developer may have offers on, but this can depend on stage. I am one of first houses to buy, and lot of interest in my corner plot. Only incentives I got was 3k towards flooring. Had it been one of the last properties at end of build they were struggling to sell, then they’d be offering a lot it incentives. I did ask for more than 3k, but didn’t get it. I am just so excited though and can live with that!