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New builds

The face of residential development in London has undergone substantial transformation over recent years. Luxury schemes and branded residences designed by award winning architects boast state of the art tech and interior design. Concierge services have branched out from the 24-hour desk in the entrance hall to partnerships with renowned top-tier hotels offering amenities from personal training spa treatments, private movie screenings to private jet bookings, securing tables at exclusive restaurants to procuring private chefs and much more.

As well as the wealth of world-class amenities offered in these high-end residential developments, new projects are carefully planned and branded by their creators, often drawing inspiration from local residents, architecture and businesses.

There are two distinct ways to purchase a new build property in the UK, “off-plan” (i.e. contracting to buy before the development has completed) and “build complete”. Both come with their own perks and quirks so it is important to be informed before moving forward.

Thinking of purchasing a new build property?

Here are the quirks to be aware of:

Limitations when negotiating your purchase contract.

There can be limitations when negotiating your purchase contract and the terms of your lease when buying new build properties. Developers are keen to ensure that the paperwork is consistent across an estate due to the volume of sales, and leases must of course be granted in largely similar form to ensure all residents are bound by the same obligations. Service charges and/or estate charges (an annual payment that goes towards the maintenance and upkeep of the estate) can be high, particularly where there are a range of facilities available to residents and large concierge teams. These charges should be reviewed and reported on by legal advisors and surveyors. It is worth comparing this (perhaps seemingly largely expenditure) against the potential costs of refurbishment/preservation works on a second-hand property.

Building safety

Since the Grenfell Tower fire, a huge emphasis has rightly been placed on building safety, with a view to addressing the cladding crisis. The Building Safety Act 2022 is a complex and lengthy piece of legislation and many smaller conveyancing firms are now refusing to act on properties which might be caught by this Act. This is because they cannot get PI cover for advising on the legislation due to the high risks involved in advising on the complexities of this new legislation which was rushed through Parliament. It is important for buyers to understand their rights when purchasing a building with cladding, and to be aware of potential costs of any potential remedial works which may be required as a result of this e . The perks that recent/ongoing/future developments have, is that the developer will have to have complied with current building and fire safety standards in order to commence work and as such should be less likely to present concerns to buyers, lenders and residents.

New home structural warranties

Under current legislation, new homes must be sold with the benefit of a new home structural warranty of at least 10 years. There is the potential for this to be increased to 15 years in the near future. Many developers will also offer a 2-year defect period from the point of completion, resulting in a more confident and reassured buyer.

Quick exchange

Transactions are generally chain-free on the seller’s side, meaning there is no dependency on other sales/purchases further up the line which might potentially delay or derail the transaction. That said, most developers will expect a quick exchange (even where the property is “off-plan”) as they often have multiple buyers interested in the scheme and are reluctant to keep their apartments and houses ringfenced for more than a few weeks.

Personalisation

During the construction of the most luxurious developments, buyers may have an opportunity to work with the developer to deliver a new build property that is slightly more personalised than the other apartments or acquire the apartment “shell and core” enabling the buyer to completely fit out the apartment to their own design. Whilst the additional costs of creating a bespoke home would no doubt be substantial, with sufficient notice and subject to the developer being able to agree it, there may also be opportunity for the developer to facilitate these works via their contractor and consultants, which is likely to be cheaper than an investor procuring their own professional team and the developer may in fact require only their team to do such works to ensure they retain control over the personnel working on what often is still a construction site. We recommend making any such intention clear at the outset of negotiations, so that the contract can provide for these works on or prior to completion.

Placemaking

Most new build schemes pay careful attention to “placemaking” and strive to forge communities, create a style of living and even develop a whole neighbourhood rather than just a block of flats. Added benefits might include indoor and outdoor play areas for children, private gym and spa facilities, carefully curated retail space and residents only business lounges/member’s clubs.

SDLT

Exactly when you purchase may alter the SDLT. In one extreme, completing on the purchase of bare land with a building contract is very different from buying a completed dwelling from a SDLT perspective, and there will be VAT compliance to consider in the bare land scenario.

Download our full report to learn more or contact our team today to help you navigate your own home buying journey.

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