Advisory body the Home Owners Alliance has recommended that buyers of new-build homes should be able to retain 2.5% of the purchase price for the first six months to cover the cost of snagging defects.
The body’s chief executive said that the proposal “would create a powerful incentive for builders to put problems right”. Such arrangements have historically been common for commercial properties and extensions but have not applied to new builds as yet.
But the Home Builders Federation (HBF) which represents the home building industry in England and Wales has called the proposal “a crude and naive suggestion” which they believe could have the opposite of the desired effect. A spokesperson for HBF said such measures would reduce consumer protections and risk creating a long drawn-out legal process. HBF believe that the anticipated new homes ombudsman will be a better way to assist buyers.
Author of the New Home blog Phil Waller also believes any retention would be “an administrative nightmare”, and that six-month retentions would be too short.
The proposed introduction of the new homes ombudsman was announced in October by the government with the stated purpose of championing homebuyers, protecting their interests and holding developers to account. It also announced plans to legislate so that all developers would have to sign up to the service. Since then, the proposal was announced a second time in January but no further action has been taken.
Last month the Climate Change Committee reported that poorly-constructed new build homes were contributing to climate change. The report states:
“The way new homes are built and existing homes retrofitted often falls short of design standards. This is unacceptable. In the long run, consumers pay a heavy price for poor-quality build and retrofit. Greater levels of inspection and stricter enforcement of building standards are required, alongside stiffer penalties for non-compliance.”
Buying a new build property
You might think that a new-build property would have fewer defects than an older building, but this isn’t always the case. Although there are advantages, it’s important to be fully aware of the pitfalls before you make this type of home purchase.
Use a solicitor
Issues do arise with new build purchases. It is not uncommon for buyers to encounter problems – even on the day of completion! An experienced property solicitor can help you manage these problems and ensure your purchase goes as smoothly as possible.
Check for common issues
The NHBC checklist is helpful in identifying common issues that occur with new homes. You should go through this and raise any issues with the builder before you move in. Once you’ve moved in, go through the list again to ensure nothing has been missed.
Pay for a survey
Surveys aren’t just for old properties – they’re advisable for new properties too. Some surveys to consider are:
- RICS Condition Report (app. £250): This is a very basic report that describes the condition of the property, identifying risks and potential legal issues, and highlighting urgent defects. It’s suitable for new-build homes, but experts recommend that you consider a more comprehensive survey.
- RICS Home Buyer Report (app. £400): This more comprehensive report is suitable for new homes and properties in reasonable condition. It looks for structural problems and other major issues. Many buyers will assume they don’t need such a survey for a new property but experts recommend you don’t skimp on this important step.
- New-build snagging survey (app. £300): It’s usual to produce a snagging list for your developer before which highlights any faults before you move in. However, producing this yourself can mean details are missed. A new-build snagging survey is carried out by an independent expert who will accurately record all the issues with the property, ensuring nothing is missed.
Know the pitfalls
It helps to know about the common problems buyers of new build homes experience. Some good sources of information include:
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