Buying New Homes - Shared Ownership
Information on buying new homes...
How to buy a new home
The financial implications
Why choose new
Finding a property
The buying process
Arranging a mortgage
Arranging a survey
Conveyancing
How to buy a new home
This guide offers an overview of things you will need to consider. However, you should always seek professional advice whenever appropriate.
For most of us buying a new home involves compromise. You know what you want - preferred location, overall size and style, number of bedrooms, number of bathrooms, a garden, loft space, garage, parking – sadly the longer the list the less likely you are to find all of it at a price you can afford. From the start it is probably as well to sort your list into the ‘must haves' the “if possibles” and the “if only's”.
The financial implications
Start by setting a budget. For most of us the monthly mortgage payment is by far the biggest item, but don’t forget the other costs of buying - solicitors fee, Stamp Duty, surveyor's fee, land registry fee and removal costs. You may find that a house builder will meet some of these costs under the terms of special offers available from time to time.
Remember to add in the cost of selling an existing home although the possibility of part exchange may eliminate much of the stress and cost involved in selling your existing home.
There are other things to consider –the need to find a deposit, the possibility of additional furniture, the costs of regular travel, Council Tax, heat, light and water costs and there may be ground rents and management fees to pay.
Affordability and mortgage calculators are available to provide a guide to outgoings and provide examples of monthly mortgage payments. Click here for the Cheltenham & Gloucester provide a mortgage payment calculator. They also provide other calculators to assist with budgeting and how much you could afford to pay each month, plus budgeting for the cost of the move, click here.
For advice provided by the Citizens Advice Bureau click here.
Why choose new
Today's new homes are better designed that ever before and make use of the most efficient and environmentally-friendly materials.
Your newly-built home will be designed to make optimum use of available space and to provide flexible accommodation that can serve different purposes as your requirements change.
New homes are energy efficient with better heat and sound insulation and equipped with energy-saving heating and cooking equipment. Virtually all of them will also come with a 10-year warranty and many come with built-in security and smoke alarms and possibly secure parking and video entry systems.
New homes may come with a range of additional extras, such as fitted carpets and extra power points, discounts or incentives that may be of offer. These may make the initial strain of finding the cash to move somewhat easier to bear. Remember to ask about what is on offer.
Consider the optional extras that will help personalize your new home - the choice of wall tiles, floor tiles, decoration, kitchen fittings and bathroom fittings. Depending on the stage of build all may be subject to your personal taste.
You may even be able to consider the addition of a conservatory that is not subject to VAT as part of a newly-built home.
Finding a property
Every home is unique and most are not for sale right now. You can review the thousands that are on offer via estate agents, newspaper advertising and a variety of websites. It may take some time. This site is designed to help you speed your search by presenting newly-built homes in the area you wish to consider. Click on the map or type in a place name or postcode and we will show you the location of current developments in that area.
Click on the development icon to find out where it is, what it is called and who is building it. For many sites you can click straight through to the builder's own web page for that development. You can make and save a shortlist, order brochures and print a sheet with opening times, telephone number and map to help make an inspection visit.
If there is an outside space, like garden or patio, you may be able to consider the addition of a conservatory, as if erected at this stage, it is part of a newly-built home and not subject to VAT.
The buying process
Agreeing a price for your home means exactly that, the asking price is the place you start. The asking price may come down if the seller wants to complete the deal soon. It may go up if several people are keen to buy. Since even a few percent either way represents a significant amount of cash, negotiations may be tense.
You can put your offer directly to the developer, to an estate agent or directly to the seller, as appropriate. They will accept it, reject it or start to negotiate.
If you can agree a price, either verbally or in writing, it will, in England and Wales, be subject to contact. You will not be committed to buy and the seller will not be committed to sell, until contracts are signed. You may be required to provide a deposit. This is normally refundable until contracts are signed and non-refundable between singing the contract and completing the purchase.
When the offer has been accepted you will need to
- Complete any mortgage arrangements. Since the time to do this may be limited it is best to make preliminary enquiries before making the offer.
- Arrange inspection and surveys as necessary to check on the condition of the property. A basic survey will probably be a requirement of a mortgage offer.
- Arrange the legal work. This will establish exactly what you are buying, whether the seller has the right to sell and ensure that you have proper title to the property when the deal is finished. This responsibility is best left to the professionals.
Arranging a mortgage
There are many types of mortgages and a large number of potential suppliers. Seek advice from several sources as to what particular mortgage offer might best suit you. Not all advisors and suppliers will put your best interests first. If you qualify as a key worker you may be entitled to help via the Government-backed Open Market HomeBuy scheme which helps you borrow extra money to buy a home.
Allow three weeks from the application for the mortgage to the formal offer being made by the lender. However, this time-scale could vary. There will be binding terms and conditions and failing to understand them at the beginning will not enable you to escape the consequences later. If you do not keep up the agreed repayments, the lender can take possession of the property.
Arranging a survey
The mortgage company will arrange any survey work it needs to establish property value. If you decide on your own survey to examine the structure of the property and identify existing or potential problems you can find more useful information at www.rics.org/Property/ResidentialProperty.
Conveyancing
The legal work (conveyancing). The legal process of transferring the ownership of the property from the present owner to the buyer is known as conveyancing. You should decide who you want to do the conveyancing work. Request quotes to see how much the service will cost and ask whether they are fixed or not, and what the figure includes, such as, stamp duty, expenses, fees and VAT. You can use either a solicitor or a licensed conveyancer.
If you want to find out if a local conveyancer is licensed you can write to:-
The Council of Licensed Conveyancers
16 Glebe Road
Chelmsford
Essex CM1 1QG
Tel: 01245 349599
The legal steps -The legal work will include local searches and enquiries such as boundaries, fittings and fixtures and possible disputes and the exchange of contracts through until completion. This is the day all monies have been transferred, such as relevant fees and the payment will be received into the sellers account and you are given the keys to your brand new home.
You will be required to arrange building insurance from the date of exchange, as once exchanged you will be responsible for the property.
For further advice from the Citizens Advice Bureau on buying a new home, selling a home or the problems with buying and selling, click here.
