With the latest news that the number of people in the UK buying a home for the first time rose to the highest level in over 10 years in 2017, more Brits could be encouraged to make that step from renting to investing in bricks and mortar if they took full advantage of the Help to Buy Schemes available, says global real estate advisor, Colliers International.
, Director, New Homes at Colliers International, provides his top tips to ensure that your buying process runs as smoothly as possible and that first-time buyers are aware of government schemes available.
• Buy from a reputable developer
You would always undertake thorough research when buying a car or choosing a holiday destination so you should be doing the same when purchasing a new home. Take time to read about the developers reputation and track record. Try not to get too bogged down with reading negative forums as any reviews could just be isolated bad experiences but, ensure that you make a note of anything that does concern you and come armed with questions when you go to view the property.
• Benefit from a 10 year warranty
All new-builds come with a 10-year building warranty such as NHBC. This warranty not only protects your deposit up to £100k should the project not complete but it also guarantees the fabric of the building for the full 10 years from completion and avoid any unexpected bills as a result of construction defects or damages.
• Help-to-Buy won’t be around forever
The government recently announced that it has helped buy more than 100,000 homes across England through its Help-to-Buy scheme. First-time buyers can put down as little as a 5% cash deposit on a registered Help-to-Buy newly built development in England and receive a Government equity loan – for up to 40%* of the purchase price (40*%* in London)This scheme is available to new buyers looking to take that first step onto the property ladder and must be the buyer’s only property on completion, purely for living in use i.e. not for buy-to-let or sublet purposes. Buyers can take advantage of this scheme for properties up to a maximum purchase price of £600,000 with a maximum mortgage of 4.5x their household income (single or joint). For example, for a new-build property worth £200,000, the buyer would need a 5% deposit of £10,000 and a 55% mortgage from a commercial lender of £110,000. The Government would then top this up with a £80,000 loan (40%). You would need to be on a minimum salary of £25,000 in order to qualify for this example. Further information can be found here.
• Don’t forget to budget for additional monthly charges
With a new-build, you will often find that service charges bump up your monthly outgoings, as essentially, you are paying a share towards the upkeep of managing and maintaining the communal ground. For example, if you have communal landscaping, lifts and a concierge, this will be apportioned and paid for through the service charge.
• Keep tabs on your completion date
When buying a new-build home, you’re the end of the chain side so you don’t have to worry about the vendor pulling out of the deal. However, with some new-builds, you often have to complete within a 28 day period, otherwise you could forfeit your deposit. In addition, despite being told a final construction date by the developer, there may be delays, so ensure that you are in regular contact with the developer or agent and have a temporary accommodation backup plan in place.
• Address snagging issues quickly
When you first move into your property, make a list of snagging’s and anything that you aren’t happy about which perhaps was agreed initially on the plans. Little issues like paint touch-ups or dirty carpets will not be covered by your building warranty and therefore needs to be raised with the developer upon handover.
Buyers are invited to a Help-to-Buy event on Friday 23 February (3pm-7pm) and Saturday 24 February (10am-4pm) at Colliers International, 50 George Street, London, W1U, 7GA. To reserve your space and see properties available under this scheme, please register at firstname.lastname@example.org or call 0207 487 1710. A presentation is being given by Capricorn Financial at 1230 on Saturday 24th February.
Footnote:  UK Finance