New Build Properties
We have seen a considerable increase in the number of new build instructions we have received at ntitle over the past few months. New build property purchases are increasing with the National House Building Council (NHBC) stating that in 2022 new build registrations increased by around 25% compared to the previous year.
There are many benefits to purchasing a new build property:
Energy Efficiency. Developers are required to use the most energy efficient processes and materials in their designs. The cost of energy and global warming is always in the purchasers’ mind, so competition to build the most energy efficient homes is high.
No onward chain. Purchasers hope to move into their new home in record speed and not having an onward chain is a huge advantage to the transaction time.
Warranty. The security of a New Build Warranty is often appealing to purchasers.
Purchase Schemes. There are many incentives available to purchasers of new build properties, which are particularly desirable for first time buyers. Schemes such as shared ownership, shared equity and part exchange, all attract purchasers towards new build properties.
The average new build price in January 2023 was £421,023, which is above the national average and some transactions can be of exceptional high value. It is vital that the title is investigated extensively and accurately.
New build title investigations are particularly complicated for many reasons:
Documentation. The documentation provided with a new build contract pack is extensive. The documentation often relates to the whole development, and it is essential that an experienced conveyancer is able to ascertain what documentation is relevant to the plot. It is also important that any missing documentation is identified and that conditions have been complied with during the development.
Time Constraints. The nature of a new build transaction means that exchange and completion deadlines must be met putting pressure on the conveyancer to meet the targets particularly if incentives for the purchaser are involved.
Complicated title. The title will usually relate the entire development, and there could even be multiple developments coming out of the title. An experienced conveyancer will need to ensure that the title is sound and corresponds with development plans as well as ensuring there are no onerous entries registered. Filed documents containing rights and covenants will be examined in detail.
Contract. A new build contract is often far more complicated than a Standard Edition contract and the clauses must be interpreted and explained to the purchaser carefully. There may be complicated clauses relating to the build, timeframes, termination and post completion requirements.
Transfer of Part/ Lease. The documentation removing the new plot from the original title whether this is a transfer of part or a new lease must be examined, understood and reported to the purchaser carefully. The documents may include provisions for rentcharges, service charges, ground rent, notice fees, exit fees as well as containing covenants and restrictions, which may burden the property or the purchaser. It is therefore essential that these documents are interpreted and reported accurately.
It requires much experience and specialist knowledge to investigate a new build title. It also takes up a lot of a conveyancer’s time and requires their full concentration. It is not a task that can be completed quickly and in a busy environment.
Perhaps it’s time to consider outsourcing your new build title investigations?