Buying off-plan unlocks offers
At the point of searching for your new home and selecting the right developer, you may look to buy off-plan, or a house that’s not yet been built. While this can be riskier, it can also bring you substantial savings. The risks are around final completion dates and the fact you are deciding on a purchase based on only seeing drawings, a brochure or a show home. But you may be able to secure a high-quality property, in a very desirable location at a discounted price. If buying this way, it’s vital you have a checklist of all the fixtures, fittings and materials used throughout the property so you can be sure the necessary standards of work have been adhered to by the developer. Doing this now may save costs in the future.
You also need to make sure you are clear on what is and isn’t included in the total cost of the home you are buying. You can negotiate on any extra fixtures, fittings or appliances you’d like included at no additional cost. Agreeing all this now will prevent any hidden surprises later. And if the developer agrees to pay any other fees such as legal fees or stamp duty, it may make a difference when it comes to your mortgage application.
The mortgage arrangement fee
Once you have found a property and have your mortgage in principle with a mortgage lender, you will need to pay a developer reservation fee to secure the property you seek to buy. This can range from £500 to £2000 and while it’s an expense at the start, it is deducted from the final price once the property sale completes. However once paid, you should always get a reservation agreement in writing from your developer.
There is then of course the actual deposit for your mortgage, which you will undoubtedly have budgeted for. After all, it is by far the largest amount you will have had to save. But, depending on who or where you get your mortgage from, there may well be a mortgage lending fee to pay too. Often around the £1,000 mark, this cost can be as little as free to up to £2,000. Bear in mind if you use a mortgage broker, they will charge for their services too. If you have gone down the broker route, make sure they are clear with you from the start as to how much their fees are. They sometimes add the fees to the mortgage, and these can vary significantly, so it pays to shop around for the best mortgage deals.
Survey and legal costs
When buying a new home, a home buyer’s survey isn’t always necessary as the home you are buying is more than likely to come with a 10-year NHBC guarantee. But you should look at getting a snagging survey by a snagging surveyor done to check for defects or any poor finishing throughout the property. A snagging survey costs on average between £300 and £600.
If you haven’t any deals on your legal fees with your developer, you will need a conveyancer and its recommended you source one who has expertise in dealing with new build propery purchases. Conveyancing fees vary depending on the value of your home and the conveyancer you instruct, but for a new build home you can expect to pay in the region of £2,000.
Stamp Duty
Again, buying new might see you able to secure an offer with the developer on stamp duty costs. These are applicable when buying a home over £125,000. However, if you are a first-time buyer you will need only pay stamp duty on homes over £300,000.
Energy Performance Certificate
An EPC (energy performance certificate) will only be necessary if you’re not a first-time buyer and you have a home to sell before buying your new one. It is a legal requirement to have one before you sell your home, and they cost around £100.
Removal costs
It’s often the one thing left to last, but have you made plans for moving? Will you be doing it yourself, maybe hiring a vehicle for extra space, or will you be using a local removals company? If you opt for the latter, then try and book ahead as early as you can. You will pay more for a removals company’s services on a Friday as it’s the most popular day. Likewise, periods around holidays get busy and will be more expensive. New build properties are often much smaller in size compared to older homes, so take the time to have a proper clear out as you pack. Not only will it see you take less but you might also be able to raise some extra cash by selling off unwanted items.
Getting home ready
If you are moving out of a property where you were responsible for the utility bills, make sure to take all the meter readings with photographic evidence of each before you leave. Do this before letting your suppliers know you are moving. There may be costs to switch suppliers or get out of your contract early. And as soon as you’ve moved into your new home, try and get the best deal with the new suppliers as soon as possible. This will save you paying out for the more expensive variable rates. The good thing buying new is that energy bills are cheaper thanks to the energy efficiency of the properties, but it still pays to get the best deals with suppliers.
Plan ahead to get your digital services connected if you can – arrange a date for installation and also find out if there will be charges for anything additional such as extra lines. And don’t forget your insurance! Not just buildings insurance, remember that contents and even car insurance may be different or even subject to additional charges once you move into your new home.
There are lots of things to add up when buying a property, right down to new furniture or soft furnishings. If you are looking to buy a new build home, you can browse the latest properties in your area, here.
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