Are there any Differences between Buying a New Build and an Older Property?
08 April 2016
Yes. Both of these types of property can cause you some challenges when buying a property. Let's look at new builds first as these can raise some particular challenges.
Buying a New Build Property
If you are buying a new build property, there is every chance you will be buying it even before it has been built. You will have seen the show home and loved it and then committed to buy your new build on the strength of the show home.
You will usually have a limited time after you agree to buy the property to exchange contracts and this normally takes place in only 4 weeks. Each housebuilder has their own deadline for contract exchange but if you don't achieve exchange within this short period, you may lose the fee you paid to reserve the property and the property itself.
These deadlines can be difficult to meet and this can be a particular challenge for the Conveyancer that you choose to complete the conveyancing for you.
It is vital to discuss how important it is for you to meet the 4 week exchange deadline and the potential consequences if it isn't met.
You should prepare in advance by researching conveyancing companies and conveyancing Solicitors, getting written quotes for the work involved with such a short deadline beforehand. This will allow you to instruct your chosen conveyancer as soon as you have paid the reservation fee.
In addition, you should also get a mortgage agreed in principle before reserving the property as mortgage offers can take some time to come through and this could cause you serious issues getting your dream house.
Delays in the Build
Even though you have to submit to very tight deadlines to exchange contracts with your house builder, a completion date may be difficult to get. House builders rely on good weather, good suppliers and materials and many other things to achieve their tight schedules. Sadly, the weather in the UK can never be relied upon and weeks of wet weather can set the builders back for long periods.
A moving completion date can cause you problems and not just the frustration of not being in a position to move into your lovely brand new home. Your mortgage offer could expire after a few months. If this is the case, you will need to stay on top of the mortgage company and get this extended regularly.
If you are selling a property, you may decide that in order to satisfy the purchasers you will sell up and move into a rented property for 6 months until the property can be built. Your purchasers will quickly lose interest if you tell them you have 12 month completion time.
Once your new build is finished, completion happens quickly – normally within 10 working days. Be prepared to get into the property and prepare your snagging list, allow the mortgage company to inspect it and then release the funds.
After all of that, you can finally move into your new build home.
Buying an Older Property
The challenges you face when buying an older property are fewer than with a new build. The property is already standing and it's likely that there will be someone already in the property.
One of the main considerations when buying an older property is to think about the type of survey you want to have done on it. There are 3 types of survey.
- A valuation survey by the mortgage company
- A homebuyer's report
- A full structural survey
On a newer property a valuation survey may be sufficient but on an older property, perhaps over 75 years old, it could be well worth you having a full structural survey done. This will help you to identify any potential problems that may be hiding beneath the surface. You can then either renegotiate the price to allow for the work to be done or ask the seller to do the work before you buy the property.
Chancel Tax Liability
In addition, there may be additional searches required on an older property and these should be advised by your conveyancer. On some older properties there is a chancel tax payable if the property is built on land that was once part of a rectory or land owned by the clergy. The chancel tax can mean there is a legal responsibility for the home owner to pay for certain repairs to the local church.
This may sound serious, but there is a simple and easy way around it. An insurance product is available called 'Chancel Liability Insurance' which protects you against any potential repair costs. The insurance policy usually costs about £30 and only costs slightly more than a chancel tax search. It could be easier and cheaper to just buy a Chancel Liability Insurance policy.
Whether you are buying an old or a new build property or somewhere in between, there are issues you should be aware of. Ask your conveyancer for advice.
Co-op Legal Services offer a fixed fee conveyancing service with a No Sale No Fee Guarantee so you know that if anything goes wrong, you are protected. The only costs you would have to pay are for any search fees or any other fees not connected to your legal costs.