Kate discussing nightmare new builds on ITV This Morning

publication date: Aug 23, 2018
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Kate on ITV This Morning

I was on ITV This Morning earlier this week discussing new build properties and the issues that can arise when buying. We also spoke to Mike, a father of three, who has been battling with his developer for 16 months over snagging issues in his new build.

You can hear Mike’s story and my views by watching the video above and discover more about buying a new build below.

What can you do before you visit a property?

  1. Check the developer’s HBF star rating
  2. Ask what they do that is above the legally required standards
  3. Find out if it is possible to visit the property during the build. Good developers actively encourage this.

What should you do before you make an offer?

  1. Find how you can see the property prior to completion, especially if contracts will be exchanged before the building is complete
  2. Ask what the developer considers minor and major problems
  3. Ask what happens if you can’t move in on the date they want
  4. Ask what happens if the property isn’t ready when expected
  5. Check the property at each stage of the build and especially a week before completion
  6. Ask what happens if you have a list of things you aren’t happy with and how long will it take to fix them.

It’s wise to ask these questions of your legal company and secure the answers in writing.

Nowadays, most developers are paid based on quality, which means properties are checked multiple times throughout the building process.

  • Properties should be structurally safe and meet building regulations during the build
  • Once finished, a home should be snagged by the developer, who should ideally make the changes required
  • Then it’s down to the buyer to snag the property from their perspective and request any changes
  • Further changes should be done by the developer.

Generally speaking, people are happy with new builds – a survey of more than 50,000 buyers by the NHBC found that more than 90% of people would buy another new build. However, the fact that 9% of buyers would not shows there is still work to be done in this part of the industry.

It must be said that people do at times need reminding that properties are ‘living, breathing things’ and things can go wrong with them that are not the fault of the developer. For example, a drain might get blocked due to someone putting things down the loo that they shouldn’t.

And, rightly or wrongly, there are certain tolerances in place for things like floor levels. If there is a serious problem and it means your furniture is wonky then it’s fair to question the developer. However, if it is hardly noticeable then it is probably not worth it.

New build incentives
Most of the support available for new builds now comes from the government, particularly the Help to Buy a new build scheme. Unlike the Help to Buy ISA, this is not just for first-time buyers and you can buy a new home with 5% deposit, free of interest for five years and with 20% loan meaning you only need a 75% mortgage; if you live in Scotland and Wales the scheme functions slightly differently so do be aware.

Some developers may offer part-exchange where they buy your property as part of the purchase. This means that you won’t need to worry about costs, however you will usually need to be trading up by a certain amount of value so this may not be available to everyone. Other developers may offer zero stamp duty or to pay legal fees so it is often a case of doing your research to see what your options are.

It is important to be aware of the cost of a new build versus the cost of an existing home and adding in these extras. Premiums can be as much as 20%, therefore it might be cheaper to ask for a discount on the price rather than have the stamp duty paid, for example.

When it comes to a snagging list, what are your rights?
Typically a snagging list is carried out by one of the customer care team prior to handing over the property to you. Any problems should be sorted before you move in, or highlighted and let you know when it’s going to be sorted. Remember, this is different to the structural guarantee from the likes of NHBC or LABC.

Usually you will be asked to go around the property when you move in and note anything you are not happy about and to let them know – ideally this should be picked up by the customer care team, but if not it’s a chance to let them know about your concerns. People are encouraged to find and report as many problems as possible at this stage.

How long does the snagging period last?
This depends on the contract. It should state what items are considered a major or a minor problem and how long it will take for the developer to sort it. This might range from immediately for major issues such as sewerage through to a paint drip on the wall which might take 28 days, depending on their workload.

Building a home is a complicated business and depends on a large number of people, plus our famously unpredictable weather. When buildings settle it can produce cracks which can be fixed but make buyers panic and think their home is about to fall down.

For more, checkout our snagging checklists:

How to run in your new build - LABC Warranty New build homes snagging - LABC Warranty

If the developer gives you a move in date, do they legally have to stick to it?
This will depend on what’s in the developer’s contract, so it’s vital to make sure you have a good legal company that specialises in new build contracts and is happy to challenge clauses which work against you and in favour of the developer.

What you have to watch for is clauses which can cause you problems with completing early or late. It is also worth knowing there is a consumer code which new build industry companies have signed up to consisting of “19 Requirements and principles that Home Builders must meet in their marketing and selling of Homes and their after-sales customer service.” You can find out more by visiting www.consumercode.co.uk.

Top tips:

  • FTBs and cash buyers can get good deals on new builds, especially at the end of developers half/full year accounts
  • It’s worth finding a similar site nearby and checking with people already living in the properties if they have had a good/bad experience
  • Check whether to use their recommended legal company or not – and if you do make sure they are protecting you
  • Be aware of housing associations versus private developers. The former don’t have the same codes so make sure to check contracts carefully and don’t assume that as they are government funded they will completely work in your favour.

All our information is brought to you by Kate Faulkner, author of Which? Property books and one of the UK's top property experts.
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