Oonagh McVeigh, Solicitor
Buying a new build off plan can be one of the most exciting ways to buy a house as you can have real control over how your home looks, but there can be some downsides. Here are some of the things you will need to consider before you take the plunge and buy a new build that is currently just a building site.
Help to buy has helped to kick start the desire for new build property and this may mean that you fail to consider the risks that may be involved – you will agree a price for the property before it is built and this could mean that the value of your property drops before you complete on it. This could cause you a problem as it could mean that you cannot secure the full amount of the price in a mortgage, but you will have to find the full amount of money to pay the agreed price.
The upside of this is that the reverse can happen – your property may actually increase in value before completion. This means you will probably pay less than other people who waited to buy and you start life in your new property knowing that it’s now worth more than you paid for it.
Once you have decided to buy off plan, you should understand how the process works – you pay an upfront deposit that is non-refundable. This allows you to obtain the property you want. Once you have paid this fee, you will then have to pay another 10 per cent of the total value of the property within 21 days and then the rest on completion.
You should be aware that your build may not go according to plan and that there may be some delays. This could impact on any mortgage offer you have as they only normally last for up to six months. If you need to, contact your mortgage company to discuss any delays on completion.
Be prepared for the possibility that you may need to live on a building site for some time after you move in, particularly if you live on a large development, but most of all enjoy your new bespoke home that boasts a ten year guarantee.
If you have any property questions, please give us a call on +44 (0) 28 9077 4500 and we will be delighted to help you (there is no charge for initial telephone discussions).
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