buying a new build home Archives | Express Conveyancing - Conveyancing Solicitors and Property Lawyers in London, Manchester & Birmingham

In the current economic climate, the housing market has become notably volatile. Rising interest rates have made the housing market unstable for both buyers and sellers alike. A key player in the current market turmoil is the steep rise we're seeing in mortgage rates. Mortgage rates, which have risen to levels not seen in several years, have put added pressure on potential homebuyers. Soaring mortgage rates are pumping up monthly payments, making it a real challenge for many people to afford their own home. So, this not only slows down would be homeowners from entering the market but also takes a big bite out of what they can actually afford. Reduced buyer sentiment is a critical aspect of the current housing market dynamics. Worries about the upturn in interest rates and a shaky economy have purchasers especially, second-guessing big financial moves, such as buying a new house. This naturally adds downward pressure on house prices, and slowing down sales. In addition, the housing market is now grappling with the ripple effects of the Cost of Living crisis. As the price tags on essentials keep climbing, families are finding themselves caught in a growing tide of financial strain. These rising costs, including those related to utilities, groceries, and transportation, make it even more challenging for families to allocate resources to what is considered a luxury – moving home. In this complex and volatile housing market landscape, New Home Property Builders find themselves particularly exposed to these challenges. In the wild world of housing, New Home Property Builders are always on their toes, tweaking prices, throwing in incentives or mixing up what they're selling to stay ahead in the game. New home builders are getting creative with incentives and efficient designs to attract buyers worried about costs. Most red brick property developers appear to have already started adapting to attract home buyers by offering great incentives, far more energy-efficient home designs with a view to lower ongoing living costs such as heating, and in some cases, years worth of mortgage payments! Volatile market conditions however, brings ample opportunities to those discerning purchasers who can afford to move. We look at in this article, what you should consider and how you need to approach your purchasing decision. Don’t buy Off-Plan Off Plan property valuations are even more speculative than purchasing an ordinary property up for sale. Unless you are intending on purchasing a property within a busy city location, most new build properties are built on brownfield or regeneration areas. What this means is that, your options for referencing like-for-like properties are quite limited and any prices set by the builder must be accepted at face value. What this means in other words, is that you are paying a new build premium which you will be unlikely to recover. A good analogy here would be to compare an off-plan property purchase to that of purchasing a brand new car. For the purposes of this example, the minute you drive your car off from the dealer, it is commonly expected that you immediately loose a few thousand pounds of the value you have initially paid for it. For completeness, one might have a counter argument that purchasing an off-plan property carries with it an opportunity cost which you would not otherwise receive when buying an existing property. It is however, beyond the scope of this article and you may wish to research this point in detail elsewhere. 2. Ask for a discount Negotiating when purchasing a new build property, especially from a developer, can be a wise and financially beneficial approach. While developers may not offer substantial discounts willingly, it's essential to understand that they are open to negotiations, and there are indeed opportunities for buyers to secure more favourable terms. Here's why you shouldn't hesitate to negotiate and some key considerations to keep in mind: Bargains Are Possible: The first point to remember is that there are often opportunities to secure a better deal than the initial asking price. Developers are usually motivated to sell properties, and they may be more willing to negotiate if it means closing a deal. Developer Expectations: Developers typically assess the financial capabilities of potential buyers. If they believe you can afford the full asking price, they might not proactively offer a lower price. But, that's not to say you shouldn't haggle a bit. In the cutthroat world of residential property, developers are ready to dive into negotiation battles, fully aware it's all part of the game. Effective Negotiation: Negotiating effectively involves doing your homework. But analyse comparable properties and the local market to negotiate effectively. Armed with this insight, you can confidently swing the bargaining power in your favour and convincingly argue for a price cut. Be Prepared to Walk Away: One of the most potent negotiation tactics is the willingness to walk away. If the developer's terms don't sit right with you, don't be afraid to say no and look for other opportunities. But pushing back could get them to offer better terms. Balancing Profit Margins: While it's unrealistic to expect a developer to sell a property at cost value, it's also essential to understand that developers are aware of the changing market dynamics. Profit margins in the real estate market may not be as high as they were during the pandemic. Developers are often more open to negotiation to secure a sale and maintain a steady cash flow. Recent Negotiation Trends: As we've mentioned, research indicates that buyers have successfully negotiated discounts of up to 14% from the original list prices. This shows that in today's market, builders are ready to bend a bit to make sure the deal is sealed. Win-Win Outcome: Effective negotiation doesn't have to be confrontational. The aim is to create a scenario where both you and the developer feel like winners, each getting what they want. By playing fair and being clear in your talks, you can land on a price that fits your wallet but also lets the developer earn their fair share. 3. Fish for freebies Many individuals might not be aware that when purchasing a new build property, the standard features and specifications included in the list price are often quite basic. In many cases, items such as flooring, fixtures, and even something as fundamental as turfing the garden are considered optional extras for which you'll be required to pay separately. However, it's entirely reasonable for prospective buyers to request these additional features as incentives when negotiating with the property developer. But get this, some crafty developers go the extra mile offering cool perks like covering your stamp duty or chipping in for legal costs tied to your new property's conveyancing fees. When considering incentives related to conveyancing fees, it's important to exercise caution. Many property developers have a preferred panel of conveyancers, which they may recommend to buyers. But hiring your own independent conveyancer protects your interests. It's strongly advisable for buyers to explore the option of hiring an independent conveyancer who works solely in their best interest. By hiring an independent conveyancer who works just for you helps make sure they're looking out for your interests, not the developer's. At Express Conveyancing, we have a wealth of experience in assisting purchasers of new build properties. We've got new build conveyancing in hand and we’ve got your back, making the new build property process smooth for you. If you're interested in exploring conveyancing services for your new build property, we encourage you to take advantage of our instant quote calculator below. Get a quote from our savvy conveyancing team, so you can make a smart choice backed by our expertise in this unique niche of property transactions. 4. Timing the Market Property builders are fundamentally business entities, and like any business, they have operational costs to manage. Because businesses need to keep the lights on, they have to get creative with their limited marketing budgets. You get to know, these recurring costs are just part of the game in the property business. The primary source of revenue for builders comes from completing property sales and handing over the keys to the new owners. However, this is when builders finally get paid back for their investment. However, the cost of holding onto properties that are ready for habitation, especially when it's the last property or one of the last on a particular development, often outweighs the benefits. Builders prefer not to have unsold properties on their hands for an extended period as it ties up capital and can lead to additional costs like maintenance and security. As a result, it's not uncommon to see builders offer substantial discounts on nearly completed developments. So, it's a win-win - builders get to boost their bottom line while buyers snag themselves an awesome bargain. Moreover, show homes, which are typically designed to showcase the highest quality features and finishes, often come with a range of added extras already included in the price. Builders create show homes with the intention of attracting a diverse range of potential buyers. As a result, these properties are often sold "as seen," with all the luxurious features and furnishings intact. Buyers who appreciate these premium finishes can benefit from the convenience of a ready-made high-end home without the need for costly upgrades. Another strategic window for negotiating a favourable deal on a new build property is timing your purchase as close to the developer's end of the financial year as possible. Just as with nearly completed developments, builders tend to be highly motivated to offload properties during this period. This gives them a chance to increase their yearly sales and make up for any slow periods they had earlier. This urge paves the way for builders to entertain offers and benefits they'd typically overlook during other times of the year. So, getting the lowdown on how property development works can give you some serious smarts when you're hunting for your next buy. Just like any business, builders have financial matters to deal with and snagging a killer deal on a new property could all come down to perfect timing. Whether it's taking advantage of discounts on nearly completed developments, exploring show homes, or capitalising on the end of the builder's financial year, buyers can leverage these insights to negotiate more effectively and potentially save on their property purchase. 5. Come Prepared When embarking on the journey to secure a new property, especially a new build, it's essential to lay the groundwork and have your financial and logistical ducks in a row. A lot of folks might not think much about the prep work, but getting all your details straight from the get-go can really boost your chances of snagging that dream property. Here's why it's crucial to take these preliminary steps: **Financial Preparation:** The first and foremost consideration is your budget. Have you meticulously calculated the maximum amount you can afford to spend on the property? This should take into account not only the property's purchase price but also additional costs, such as conveyancing fees, mortgage valuation fees, and even rent if the property won't be ready for occupancy for some time. Knowing your financial limits is the foundation upon which all your decisions will be based. **Mortgage Pre-Approval:** Contacting a mortgage lender beforehand to obtain a mortgage offer in principle is a prudent step. Getting pre-approved not only lets you know how much money you can borrow, but it also shows the seller that you're a legitimate buyer who's got their finances sorted out. Getting pre-approval shows the builder you're serious and can pay. **Conveyancing Solicitor:** A crucial part of the process is having a reliable conveyancing solicitor in place. This legal professional should be ready to immediately start working on your file as soon as you successfully reserve a property and receive the preliminary documents from the builder. Having an efficient solicitor ensures that the transaction progresses smoothly and that you meet all the necessary deadlines. **Builder's Perspective:** It's important to consider the builder's point of view. Sales staff at property developments deal with numerous buyers and sellers throughout the year. They can quickly discern which potential buyers are well-prepared, financially stable, and capable of following through on the transaction. Showing that you're ready and on top of things can give a good vibe, possibly leading to better deals or an easier time when hashing out details. But keep in mind, this isn't everything there is to it. We are specialists in New Build Conveyancing and our Panel Solicitors regularly advice purchasers of all manner of New Property Transactions. Speak to us if you need any more information about the New Build Conveyancing Process in general or to obtain a Conveyancing Quote.

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12 May 5 steps to bagging a bargain new build

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