Buying a New-Build Home: A Guide for UK Buyers

Key points

Buying a new-build home usually starts with a reservation agreement and fee, followed by legal work, a mortgage offer and completion when the home is finished.
Developers registered with the New Homes Quality Board must follow its Code, and buyers can take unresolved complaints to the New Homes Ombudsman Service.
New homes are usually sold with a structural warranty, and each mortgage lender sets its own rules on the cover it will accept.
Build dates can move, so check how long your mortgage offer lasts and what the contract says about delays.
Contracts, property taxes and land registration differ in England, Wales, Scotland and Northern Ireland, and Scotland has its own rules on Home Reports.

How does buying a new-build home work?

You usually reserve a home by signing a reservation agreement and paying a fee, then instruct a solicitor and apply for a mortgage. Contracts are exchanged, or missives concluded in Scotland, once the legal work is done. You complete and get the keys when the home is finished and signed off, which may be some time after you reserve.

Many new homes are sold off-plan, before they are built, using plans, a specification and sometimes a show home. That gives you time to choose finishes, but it also means the completion date can move. This guide explains what to check at each stage. Rules on contracts, property tax and land registration differ between England, Wales, Scotland and Northern Ireland, so we flag the main differences along the way.

What should a reservation agreement include?

A reservation agreement takes a specific plot off the market for an agreed period while you arrange your mortgage and legal work. Before you sign, check:

the price, the plot and the house type, with plans and a specification
the reservation fee, how much is refundable and in what circumstances
the cooling-off period and how long the reservation lasts
whether the home is freehold or leasehold, and any service charges or estate management charges
who will look after roads, footpaths and open space, and whether the council will adopt them
the expected completion window and what happens if it changes

Under the New Homes Quality Code, reservation agreements must include a cooling-off period, and the developer must refund the full reservation fee if you cancel within it. After that, the refund can be reduced by any deductions set out in the agreement.

What are the New Homes Quality Code and the New Homes Ombudsman Service?

The New Homes Quality Code is an industry code run by the New Homes Quality Board (NHQB), an independent body. It sets standards for how registered developers market and sell new homes and look after customers after completion. The NHQB describes its aim as improving customer service across the UK, and the Code's text includes provisions that differ between England, Wales, Scotland and Northern Ireland.

The Code applies only to developers that have registered with the NHQB, so check before you reserve. Under it, a registered developer must provide an after-sales service for at least two years after completion, and you can take an unresolved complaint to the New Homes Ombudsman Service, generally within two years of reservation or completion, whichever is later. Some developers follow a different scheme, the Consumer Code for Home Builders, so ask which code applies and how to complain.

What does a new-home warranty cover?

New homes are usually sold with a structural warranty from a warranty provider. NHBC, Premier Guarantee and LABC Warranty are among the providers you may come across. Policies differ, but they usually have an early period in which the builder must put right defects, followed by a longer period of insurance against specified structural problems.

A warranty is not a promise that everything will be perfect. It normally excludes wear and tear, minor shrinkage and items covered by manufacturers' guarantees, so read the policy document, not just the summary. Mortgage lenders care about warranties too: the UK Finance lenders' handbook shows that each lender sets its own rules on whether it will lend on a new home without a recognised warranty or a professional consultant's certificate.

What is snagging, and when should I check the home?

Snags are defects or unfinished items, such as sticking doors, poor paintwork, missing sealant or cracks in plaster. Some snags are normal in a new home, and the developer should put them right.

Under the New Homes Quality Code, the developer must give you the opportunity of a pre-completion inspection, and you can appoint a suitably qualified inspector to carry it out for you. After you move in, report snags in writing, keep copies and photos, and follow the developer's after-sales process. An independent snagging inspection is optional and has a cost, but it gives you a clear list to work from.

What happens if my mortgage offer runs out before completion?

Mortgage offers are valid for a fixed period set by the lender. With a new home, build delays can push completion past that date. If that looks likely, speak to your broker or lender early. Some lenders will extend an offer, sometimes after a fresh valuation; others will ask you to reapply, which could mean a different rate or loan amount.

Ask the developer for regular build updates, and ask your solicitor how the contract deals with delays, including any longstop date after which you can withdraw. Tell your lender about any significant change in your income or borrowing before completion, because it can affect the offer.

What costs should I budget for when buying a new home?

The price of the home is only part of the cost. Most buyers also need to budget for:

the deposit and the reservation fee, which is usually deducted from the price at completion
solicitor or conveyancer fees and search costs
the property tax that applies in your nation, explained below
mortgage arrangement and valuation fees, and any broker fee
an optional independent snagging inspection
flooring, curtains and furniture, which are not always included in a new home
any service charge or estate management charge once you move in

Developers sometimes offer incentives, such as paying certain costs or including extras. Tell your lender and solicitor about any incentive, because lenders take them into account and they are normally declared during the purchase.

How does buying a new home differ across the UK?

Nation	Binding contract	Property tax	Land register
England	Exchange of contracts, then completion	Stamp Duty Land Tax	HM Land Registry
Wales	Exchange of contracts, then completion	Land Transaction Tax	HM Land Registry
Scotland	Offer and conclusion of missives, then settlement	Land and Buildings Transaction Tax	Registers of Scotland
Northern Ireland	Contract signed by both sides, then completion	Stamp Duty Land Tax	Land & Property Services

In Scotland, sellers of most homes must provide a Home Report, but the regulations make an exception for a new house that has not previously been used as a house or for any other purpose. First buyers of a new-build home therefore do not normally receive one, although the lender will still value the property. Whatever the nation, use a solicitor or conveyancer who regularly handles new-build purchases.

Can I register interest in a Land to Homes new home?

Land to Homes is a new venture and has no homes for sale yet. If you would like to hear about new homes as they are planned, you can register your interest on our page for home buyers. You can also read about our plans for new-build homes for sale and our approach to new home construction or, if renting suits you better, our guide to renting a new-build home.

Frequently asked questions

Can I get my reservation fee back?

It depends on the reservation agreement. If the developer is registered with the New Homes Quality Board, the agreement must include a cooling-off period, and you get the full fee back if you cancel within it. After that, the developer can make any deductions set out in the agreement, such as its legal costs. Read the terms carefully, and ask for anything unclear to be explained in writing, before you pay.

Do I need a survey on a new-build home?

It is not a legal requirement. Your lender's valuation is carried out for the lender and is not a survey. Many buyers commission an independent snagging inspection before or soon after completion, and the New Homes Quality Code allows a suitably qualified inspector to carry out a pre-completion inspection on your behalf. Whether it is worthwhile depends on the home and how confident you are at spotting defects.

Who looks after the roads and open space on a new estate?

Roads are often built to a standard that the highway or roads authority can adopt, after which it maintains them. Until then, or where roads and open spaces are not adopted, a management company usually looks after them and residents pay a charge towards the cost. Ask the developer what will be adopted, what will not, and what any charges are expected to cover, before you reserve.

How long does the developer have to fix problems?

Under the New Homes Quality Code, a registered developer must provide an after-sales service for at least two years after completion, and you can complain to the New Homes Ombudsman Service, generally within two years of reservation or completion, whichever is later. Separately, the structural warranty covers specified defects for a longer period. Keep written records of every issue you report and how the developer responds.

Sources

This guide is general information about how land and housing processes usually work. It is not legal, tax or financial advice. Rules differ between England, Wales, Scotland and Northern Ireland and change over time, so take advice from a solicitor, accountant or land agent on your own situation.

Buying a new-build home: what to expect from reservation to keys