First time buyer FAQs: Your new-build development questions answered

You always remember your first; a saying that’s particularly relevant when you’re a first time home buyer. And when that house or apartment is a new build, it’s especially exciting because, from living in a brand-new property to joining a budding community, there are so many ‘firsts’ to enjoy. But before getting to that point, you probably have some questions, like what discounts and schemes are available, and what does buying off-plan actually mean? Find the answers to all those queries and more below.

Are there any incentives or schemes available for first time buyers purchasing new-build homes?

Yes, several schemes offer first time home buyers a discount on new-builds. This includes the Discount Market Sale and Discount Full Ownership (available in London only) schemes which provide discounts of around 20% off new-build properties. There’s also the government-backed First Homes scheme which allows first time buyers in England to purchase a new-build in their local area with 30%-50% off the market price. Eligibility for these schemes depends on certain criteria being met, so make sure to check what discounts you may qualify for. Find out more about other buying and rental schemes available here.

How much deposit do I need to buy a new-build?

Mortgage lenders often require a 15-25% minimum deposit for new-builds, but there are other ways to get on the housing ladder with a smaller amount. One option is the Deposit Unlock scheme – this allows you to purchase your first home from participating house builders and mortgage lenders with a 5% deposit, which could make it more accessible than buying on the open market. Again, you must meet certain criteria to be eligible for this scheme.

However, the deposit you’ll be required to put down on a home will vary greatly depending on multiple factors such as the housing tenure, type of property and your personal finances. We would recommend speaking with a financial expert such as a mortgage broker to discuss the options available to you.

Can I negotiate the price of a new-build property or are the prices typically fixed?

As with any property purchase, you can make an offer when buying a new-build. Of course, making an offer doesn’t necessarily mean it will be accepted, but it may start the conversation for price negotiations to take place. While negotiating the price of a new-build home is often more difficult compared to if you were buying an older property, it may create the opportunity to negotiate other upgrades to the design specifications of the property or alternative incentives the developer may offer instead.

What is buying off-plan?

During your new-build property search, you’ll discover opportunities to buy ‘off-plan’. In short, this means purchasing a property before it’s finished being built. Purchasing off-plan at this early stage of building development usually means there are more available plots to choose from. And, depending on the developer, you may get a say on the internal layout and fixtures, such as flooring and lighting, to suit your preferences.

How do I navigate the process of selecting upgrades and customisations for my new-build home?

When it comes to interior design, the option to pick what you want will depend on the developer and building stage. You may be able to request certain fittings or negotiate upgrades based on options that are available. One of the biggest benefits of purchasing a new build as a first time buyer is that it will likely have the latest mod cons and high-spec appliances, ticking a few things off your decorating list. Most feature a neutral, contemporary aesthetic too, providing a blank canvas you can easily add personality to after moving in.

What warranties and guarantees come with a new-build property?

Most new-builds come with a 10-year structural warranty, the most common being the National House Building Council (NHBC)’s Buildmark Warranty, as the majority of mortgage lenders require one. This covers any defects with the building that weren’t uncovered on completion.

When can I view a new-build home?

Being able to view the new-build you wish to purchase will depend on the building stage of the development, as it may not be complete yet. Many developers will have a show home available for viewing, giving you a good idea of what to expect. They’ll also be able to provide more information about any differences to the property, be it the layout, size or what’s included in the purchase. For instance, if the plot you’re eyeing up comes with parking space or a garden. If you buy off-plan, the developer will keep you updated throughout the process and let you know when your home is safe and ready to view.

What should I look for in terms of construction quality and standards when inspecting a new-build property?

If a new-build has caught your eye, start by researching the developer and management. Look at previous projects they’ve completed and read reviews from residents if possible.  

When it comes to spotting any defects, the best course of action is to get a snagging survey. This will highlight anything that needs fixing before you move in. Ideally, you’ll want to get the survey done before exchanging contracts, but sometimes developers won’t agree to this until after completion. In that case, have your home surveyed as soon as possible after moving in. Any corrections needed will be covered by your new-build warranty.

What does completion on notice mean?

If you’re buying off-plan, you may not have an exact completion date due to the ongoing building work. Instead, you’ll exchange contracts before completion and receive notice of a timeframe when completion will happen once the building is finished. So, unless you’re buying a new-build home that’s ready to move in, you’ll have completion on notice.

What are the hidden costs associated with buying a new-build property that I should be aware of?

You’ll normally have to pay a reservation fee when buying a new-build. This is often deducted from the purchase price, but your reservation agreement will clarify the terms.

Once you’ve moved in, there may be extra fees depending on whether the property is freehold or leasehold. If it’s an apartment, it will most likely be a leasehold, which comes with an annual service charge and ground rent. It’s also worth noting that some freehold properties have estate management fees. So, regardless of whether you buy a freehold or leasehold home, it’s worth checking if there will be extra charges on top of your mortgage.

You may also need to pay Stamp Duty, depending on the value of the property. First time buyers in Shared Ownership homes will pay zero Stamp Duty on the first £425,000 of any home that costs up to £625,000.

At Share to Buy, we make your choice easier with a selection of new-build homes across England, available through alternative homeownership schemes such as Shared Ownership. Get your home-buying journey underway using our property portal.