Newly built properties in the United Kingdom - The Legal Issues

Newly built properties in the United Kingdom

When talking about newly built properties in the United Kingdom this means a house or flat which has been built usually within the last two years. Often this will be purchased directly from a developer or in some cases will have had one previous owner.

There is a continual development of new build properties in the UK with this proving an extremely lucrative market for developers. It is also in many cases a good option for individuals wishing to purchase a property and in a lot of cases is the preferred option for first time buyers.

What are the advantages of purchasing a newly built property?

Newly built properties are in most cases free of any required maintenance before an individual can move in. A lot of older properties often come with such problems as damp, wood rot or some form of structural issues. Often this is one of the main reasons why younger first time buyers will take the option of purchasing a new build as they view the only expense purchasing the property as they will not need to hold any money back for any maintenance work.

Newly built properties will often come with all white goods already installed again removing an added cost following purchase of the property. Furthermore, many newly built properties are also located within gated communities or will often have garages attached.  This may be viewed as a safer option security wise than many older properties where cars are simply parked outside on the road in front of the house.

Are there any issues or disadvantages when purchasing a newly built property?

Certain issues may arise in relation to the mortgage for the purchase of a newly built property. These issues are as follows:

  • Many mortgage lenders will often require a higher initial deposit for the purchase of a newly built property – in some cases this deposit will be as high as 20 or 25 per cent
  • Some mortgage lenders may require small monthly payments but this will be countered against a deposit which may be as high as 50 per cent for flats built in the last two years
  • In many cases an extra 10 per cent deposit will be added to the already existing deposit in relation to flats or houses built within the last two years
  • Some mortgage lenders will not lend at all if the building is more than five stories tall
  • At the mortgage application stage it is also common practice for mortgage lenders to down value the property – this may result in a smaller mortgage offer than would be provided for an older property meaning that buyers may struggle to find the rest of the money to purchase the property

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For more information on:

  • Is it legal for the mortgage lenders to impose these conditions on the purchasers of newly built properties?
  • What should I try and do to counteract this?
  • Is there anything else which I should be aware of?