Buying a New Build Property — What to Watch Out For and Your Rights

What Is a New Build Property?

A new build is a property that has never been lived in, constructed either for sale directly by a developer or as part of a larger development scheme. New builds range from single houses on small infill plots to large estates of hundreds of homes built over several years. Purchasing a new build differs significantly from buying a second-hand property, and understanding the process is essential before you commit.

The Reservation Process

Most new build purchases begin with a reservation. You pay a reservation fee — typically between £500 and £2,000 — to secure a specific plot or unit. This fee is usually non-refundable if you subsequently pull out, though it is normally deducted from the purchase price at completion. Read the reservation agreement carefully: it will specify how long you have to exchange contracts, usually between 28 and 56 days.

Get your solicitor and mortgage broker instructed immediately after reserving. New build timescales are tight, and developers will not extend reservation periods generously.

Exchange and Completion Timescales

For off-plan purchases — where the property has not yet been built — you may exchange contracts many months before the property is ready. Off-plan completions can be 12 to 18 months from reservation, sometimes longer. This creates a specific risk: you will be legally committed to buy at the exchanged price, but your mortgage offer will expire (typically after six months). You will need to renew your mortgage offer, and there is no guarantee the same rate will be available.

Developers will give an estimated completion date, but these frequently slip. The contract will usually include a “longstop date” — the latest date by which the developer must complete or you can withdraw and recover your deposit. Check this date carefully and ensure it is realistic.

Developer Contracts

Developers use their own standard contracts, which are heavily weighted in their favour. They typically allow developers to make minor changes to the specification, alter the layout slightly, and change finishing materials. Your solicitor must review the contract in full. Do not use a solicitor recommended exclusively by the developer — appoint your own independent solicitor to represent your interests.

Snagging

Snagging is the process of identifying defects and unfinished work in a new build property before or shortly after legal completion. New build homes routinely have snagging issues, ranging from minor cosmetic problems (paint drips, missing grout, scratched glass) to more significant defects (poorly fitted doors, leaking plumbing, inadequate insulation).

You have the right to a pre-completion inspection. Consider engaging an independent snagging company — professional snaggers typically charge £300 to £600 and can identify hundreds of items that an untrained eye would miss. Present the snagging list to the developer before legal completion and insist on a written commitment to rectify identified defects.

NHBC Buildmark Warranty

Most new build homes in England and Wales are covered by the NHBC Buildmark warranty. This provides two layers of protection: a two-year developer defects period, during which the developer is responsible for rectifying any defects caused by their failure to meet NHBC standards; and a ten-year structural warranty, which covers the cost of repairing major structural damage caused by a failure to build to NHBC requirements.

The Buildmark warranty transfers with the property to subsequent owners. Check that your new build is registered with NHBC (or an equivalent approved warranty provider) before exchanging contracts.

Help to Buy Closure and Alternatives

The government’s Help to Buy equity loan scheme closed to new applicants in 2023. Alternative schemes now available include First Homes — which offers first-time buyers a discount of at least 30% on new build homes in England — and Shared Ownership, which allows buyers to purchase a share of a property and pay rent on the remainder. Your developer or mortgage broker can advise which schemes apply to the development you are considering.

The New Build Premium

New builds typically sell at a 5 to 10% premium over comparable second-hand properties in the same area. This premium reflects the fact that the property is new, under warranty, and energy-efficient. However, it also means that the property’s value may fall in the short term once it is no longer new. Assess the local market carefully and do not rely on the developer’s own comparable evidence.

Leasehold Issues

Historically, many new build houses were sold as leasehold rather than freehold, with escalating ground rents that made the properties difficult to mortgage and sell. Legislation introduced in 2022 now prohibits the sale of new build houses as leasehold in most circumstances, and ground rents on new leases have been set to zero. If you are buying a new build flat, it will still be leasehold — check the lease length, service charges, and any ground rent provisions carefully.

Title Registration

Your solicitor will apply to HM Land Registry to register your title after completion. For new builds, this can take several months due to the volume of registrations on large developments. Until registration is complete, your title is protected by a priority search, but you will not have a registered title number. This is normal and not a cause for concern.