Notwithstanding any temporary “wobbles” in the UK economy caused by the Brexit process, it would appear that the demand for housing in the Thames Valley area (in particular in and around Reading) is likely to remain strong.
With plans to build thousands of new homes in Reading and adjoining boroughs in the next few years plus the plethora of house to flat and office to flat conversions it would appear that a significant part of that demand will be satisfied by “new build homes.”
The UK Finance Mortgage Lenders Handbook (the publication which sets out the requirements of the majority of high street lenders when lending for the purchase of property) defines a new home to be a home (so flat or house) which has been built or converted in the past 10 years.
So why shouldn’t you simply go ahead and use the conveyancer recommended by the estate agent acting on the sale?
The first point to remember is that many estate agents recommend conveyancers on the basis of “referral fee” arrangements under which the conveyancer pays back a significant part (sometimes more than half) of the headline “legal fee” to the estate agent (who will, of course, also already receive his commission on the sale). So, for example, if you are paying say £800 for legal fees you may, in fact, only receive £400 worth of legal services – because that is the money which the conveyancer will have received.
Secondly – as the estate agent acts for the seller and agents highly value the kind of multiple sale instructions which they get from developers – doubt may come into your mind as to how effectively a conveyancer who has a close relationship with the agent will represent your interests (the interests of the buyer) in the transaction.
So, why does this matter? Surely coverage through an approved warranty such as NHBC Buildmark (which is likely, in any event, to be required by your lender) will give you adequate protection?
This is simply not the case. Disgruntled buyers have commented to me in the past that they feel they have less protection when buying a new build home than they would if they were buying a kettle from a high street retailer.
The definitions of “Defect” and “Damage” (physical damage caused by a Defect) – the items covered by Buildmark – are quite tightly drawn and focus, mainly, on failure to comply with Building Regulations and other statutory requirements. This (together with some fairly broadly drawn exclusions and limitations) may mean that your cracked kitchen tiles and creaking doors are not covered. (This is not a criticism of NHBC Buildmark as such. Other approved warranty schemes have similar limitations.)
An experienced new build conveyancer will however insist on snagging provision in the purchase contract itself. This should say that the developer will return to remedy minor defects in the building (such as your cracked tiles and creaky door) if they arise within, say, a year from purchase.
With more and more homes being built on brownfield land and/or near to, or on, the floodplain, it is also important that appropriate pre-contract enquiries are raised. NHBC Buildmark provides a limited degree of cover in relation to “Contamination” (again as defined by NHBC) but this may not match up to your expectations (particularly if there are issues as to whether or not a particular “contaminant” was present at the date of purchase or has leaked over from nearby “environmentally sensitive” land since that date.) NHBC Buildmark provides no cover for damage caused by flooding.
An experienced new build conveyancer will properly interpret search results and will not shy away from raising awkward issues if they arise and ensuring that you have been adequately protected.
Finally (for the purposes of this article at least), developers are likely to seek provision in the contract allowing them to serve notice and complete the sale as and when the property is ready. An experienced new build conveyancer will be aware of the dangers of agreeing to such provision on an open-ended basis and will push for a long-stop date to be set in the contract.
In summary, then, using an experienced conveyancer, such as one of the team at Barrett and Co, can end up saving you substantial sums of money (and heart-ache) on a transaction which is likely to be one of the most significant transactions in your life, both in terms of the sums of money involved and of the “emotional capital” inevitably invested in the home in which you are going to live.
We occasionally pay referral fees when we receive a referral of work from an estate agent, but we will never allow the payment of those fees to affect your interests adversely. If you come to us directly however you will avoid referral fees altogether.
Similarly, whilst we use every effort to make your transaction proceed quickly and smoothly, we will not shy away from raising issues where those issues need clarification. This is particularly relevant on new build properties.
If you would like more information, I have written a book on business law which is available to download for free.