The Help to Buy Scheme is a government scheme available to first-time buyers and existing homeowners who want to buy a ‘new build’ house. The purchase price must be no more than £600,000. Under this scheme, you can borrow 20% of the purchase price interest-free for the first five years as long as you have at least a 5% deposit. If you live in London, you can borrow up to 40% of the purchase price. The scheme is available until 2021.  The basics of the Scheme are:

• You need at least 5% of the sale price of your new-build flat or house as a deposit.
• The Government will lend you up to 20% of the sale price.
• You borrow the rest (up to 75%) from a mortgage lender, on a repayment basis.

No interest or fees are payable on the Government’s equity loan for the first five years. In the sixth year, you will be charged 1.75%.  After that, the fee rises by inflation based on the Retail Prices Index (RPI) plus 1% each year.

Years 1-5: no fees
Year 6: 1.75% of the loan
Year 7 onwards: 1.75% + RPI + 1%
These fees do not go towards paying off the government loan.

When you sell your home, or the mortgage is paid off, you have to repay the equity loan plus a share of any increase in the value.

In recent years we have been involved in some of the lead cases both on liability and quantum and a thorough approach to both investigating and dealing with these complex claims.

If you have a property sell we can take care of your sale at the same time as your purchase.  Our experienced Teams will notify the buyer’s solicitor that you are purchasing a new build property and impose the same exchange deadline set by the developer on to your buyer.  If the new home you are purchasing is still under construction we will ensure the Sale Contract is linked to your Purchase Contract with the same requirements for completion, to enable you to continue living in your current property until your new home is build complete.

If you are selling a property which is leasehold, or a freehold property subject to a management company service charge payment, it will be your financial responsibility to provide a “sales pack” from the management company.  The cost of the packs vary between management companies but can cost between £100-£400.

Upon completion of your sale we will redeem your existing mortgage and pay any associated sale costs such as estate agent fees and leasehold apportionments.

Sometimes a developer will agree to purchase your existing property as part exchange towards their property.   The advantages of part exchange are that there are no estate agents fees and takes away the stress of being in a chain.  Contrary to popular belief, the part exchange process is exactly the same as if you were selling to a private purchaser. The developer’s solicitors will ask the same, if not more, comprehensive enquiries.

The Teams at Davies and Partners Solicitors Residential New Homes Department have in-depth knowledge and experience in acting for purchasers of new build leasehold properties from developers.  We will guide you through the process of purchasing a leasehold property so that you fully understand your obligations under the Lease.

The vast majority of leasehold properties are apartments.  If you own a leasehold property, you do not own the land the property sits on.  At the end of the Lease term ownership returns to the landlord.

If you own a leasehold property, the repairs and maintenance on your property are your responsibility.  However, you are not responsible for maintaining and running the building. The landlord will do this or appoint a managing agent to do this for them.

If you wish to make changes to your property you will usually need to get the landlord’s prior written permission.  The landlord may make a charge for providing its consent.

The leaseholders will share the cost of this by paying a service charge to the landlord or its agents.  You might also be asked to pay into a sinking fund, to help cover any unexpected maintenance work needed in the future.

Service charges vary from property to property and are to pay for example towards:

• Maintaining communal gardens and areas
• Electricity bills for communal areas
• Repair and maintenance of exterior walls

Other charges might include:

• Ground rent;
• Administration charges, or
• Buildings insurance (arranged by the landlord)
• Liability insurance for communal areas

You should ensure you are aware of the service charges before you put in an offer on a property as it may affect whether you can afford to live there.

If you own a leasehold property, the repairs and maintenance on your property are your responsibility.

First and foremost, the Teams at Davies and Partners Solicitors Residential New Homes Department are here to help and guide you through what many consider to be one of the most stressful times of your life.  Our aim is to make your house purchase smooth and easy and to make it as stress free as possible. We will guide you through every aspect of purchasing your new build home.

The Teams’ many years of experience has enabled them to streamline the conveyancing process to enable you to meet the exchange deadlines set by developers; breaking down the legal jargon and providing a comprehensive report for you to consider in the comfort of your home.  The Teams are available to answer any queries you may have.

Buying a new build home is very different to buying a second hand home.  The developer will impose a strict deadline in which to exchange Contracts, often 21-28 days from the date of reservation.  Often, Contracts are exchanged before the property is even built, giving uncertainty of when completion will actually take place.  

You are protected under The Consumer Code for Homebuilders.  The Code came into effect in 2010 and is a code of conduct for homebuilders, its purpose is to make the home buying process fairer and more transparent for purchasers.  

Many people decide to ‘buy new’ from a housebuilder in the belief that it will be a much less troublesome experience than buying a second hand home.  Some of the benefits to buying a New Build Home:

• New Build Homes come with a warranty and insurance of 5 to 10 years. Check with the builder which warranty they offer and ask for a copy of the policy document when you reserve your home.
• As the very first owner, a new-build home enables you to create your own style, free from any decorating disasters by previous owners.
• Purchasing a new build home can minimise the chain’s length because you will be at the end of the selling chain.
• New build homes are built with higher levels of insulation. They have more efficient heating systems than ever before. Better energy efficiency means a reduction in carbon emissions and lower heating bills, helping you save money.
• Some, but not all, developers operate their own buyer incentive schemes such as part exchange with your existing property, payment of stamp duty, contribution towards legal fees.
• You can choose your desired plot and if reserved at an early enough stage you can personalise the house to your individual taste and pay for upgrades to the property.

The Teams at Davies and Partners Solicitors Residential New Homes Department have in-depth knowledge and experience in dealing with the Armed Forces Help to Buy Scheme.

Regular Armed Forces personnel can benefit from a £200 million scheme to help them get on the property ladder. The Forces Help to Buy Scheme enables servicemen and servicewomen to borrow up to 50% of their salary, interest-free, to buy their first home or move to another property on assignment or as their families needs change.

The pilot scheme, which launched in April 2014 and has now been extended to 2018, aims to address the low rate of home ownership in the armed forces.

Some developments will have Discount Market Value properties which are only available to qualifying purchasers.  A qualifying purchaser for example could be someone who has links to the area and lives within a certain distance from the development, or it could be linked to their profession.  The Scheme allows qualifying purchasers to purchase a home at between 20-30% below market value yet still own 100% of the property. The Council will retain the 20-30% equity in the property.  

There are various restrictions on re-selling Discount Market Value properties for example any future owner must meet the criteria of a qualifying purchaser.  You would also be responsible for the Council’s costs in agreeing to a sale to a new qualifying purchaser.

The advantage over conventional shared ownership is that no rent is payable on the portion of the property the council owns, making monthly outgoings significantly less. Buyers can live there indefinitely, and if they sell and prices have risen, they will profit.

If you’re buying a home that costs over £125,000, you will have to pay Stamp Duty Land Tax on your purchase.  This tax applies to both freehold and leasehold properties – whether you are buying outright or with a mortgage.

A reform of residential property stamp duty announced by the Chancellor in his Autumn 2014 statement means that rates will now only apply to that part of the property price that falls within each band, which is 0% paid for the first £125,000, 2% on the portion up to £250,000, 5% up to £925,000, 10% up to £1.5m and 12% on anything above that.

For example, if your new home costs £125,000 or under you will pay no Stamp Duty. If it costs £175,000 you will pay £1,000 (2% of the property value that falls within the relevant band).

This is an example of how much Stamp Duty would be payable based on a purchase price of £275,000:

• Portion 1: £0-£125,000 (0% tax) = 0.00
• Portion 2: £125,000.01-£250,000 (2% tax) = £2,500.00
• Portion 3: £250,000.01-£275,000 (5% tax) = £1,250.00
• Total Stamp Duty paid: £3,750.00

The Chancellor announced in the Autumn 2017 Statement Stamp Duty Relief has been awarded to first time buyers.

Costs of New Build Home Sales Service

Legal fees – freehold purchase:

All purchases will be subject to a Stamp Duty Land Tax preparation fee of £60.00 including VAT and an Admin fee of £36.00 including VAT.  If the property is leasehold our legal fees increase by £150.00 plus VAT.

Legal fees – freehold sale:

All sales will be subject to an Admin fee of £36.00 including VAT.  If the property is leasehold our legal fees increase by £150.00 plus VAT.

Legal fees – freehold and leasehold remortgage:

What the costs include

Our fees cover all of the work required to complete your sale, purchase or remortgage, including liaising with mortgagees and solicitors, dealing with registration at the Land Registry and dealing with the payment of Stamp Duty Land Tax (Stamp Duty) if the property is in England, or Land Transaction Tax (Land Tax) if the property you wish to buy is in Wales.

Disbursements are costs related to your matter that are payable to third parties, such as Land Registry fees. We handle the payment of the disbursements on your behalf to ensure a smoother process.

Typical disbursements relating to a purchase:

Typical disbursements relating to a sale:

Typical disbursements relating to a remortgage:

Services not included in the price

Whilst this firm does not charge additional legal/administration charges for circumstances which occur in every transaction (eg contribution to Professional Indemnity insurance premium), there are circumstances where additional time is genuinely expended which does not apply in most cases.  The following list is not exhaustive of circumstances where additional time is expended, but here are some examples of potential additional legal fees which may apply.

The Experience and qualification of our team

To see who is on our experienced team, visit our dedicated new build home salesbuild home sales page.

How long will a typical sale or purchase take?

How long it will take from your offer being accepted until you can move in to your house will depend on a number of factors. The majority of Developers require exchange of Contracts to take place within 3-4 weeks from reservation.

Steps of a typical sale

1. SEND DOCS TO CLIENT TO COMPLETE

These docs are return pack, sellers property information form and fixtures and fittings list

2. ORDER OFFICE COPIES

Check how many charges on the property if more than one make sure we have details from the client. Also check who the registered proprietors of the property are (We may need evidence of Change of Name i.e. Marriage Certificate etc) Also order any copy documents we may need.

3. ONCE DOCS RECEIVED BACK

Request deeds from mortgage lender and request a redemption statement from mortgage lender.  Prepare contract and sent to other purchasers solicitors together with office copies, any copy documents and sellers property information form and fixtures and fittings list.

4. SOLICITORS WILL RAISE ENQUIRIES

We will answer any enquiries of a legal nature other enquiries will be sent to the client to answer

5. SEND CONTRACT TO CLIENT TO SIGN

6. WAIT FOR OTHER SIDE TO BE READY TO EXCHANGE

Once they are ready discuss completion dates will client

7. EXCHANGE

Request another redemption statement calculated to the completion date. Send client completion statement and bill.  Ask for a forwarding address for client and where the proceeds of the sale are to be sent.

8. COMPLETE

Redeem Mortgage

Steps of a typical purchase

1. CONTRACT & SUPPORTING DOCUMENTS

These are supplied by solicitors, they are checked by fee earner and we raise additional enquiries.

2. SUBMIT SEARCHES

Can only submit searches when money on account received from clients and plan received from sellers’ solicitors.

3. SEARCHES BACK

Fee earner to check searches and raise any additional enquiries with solicitors i.e. requested any planning documents that were shown up by searches.

4. AWAIT SOLS REPLIES

Once we have these replies and are happy with the answers and we have and the

5. MORTGAGE OFFER

6. REPORT TO CLIENT ON PROPERTY

The report will tell them rights the property benefits from and any covenants (promises) the property is subject to (i.e. cannot put an extension on the property without builders consent or contribute to shared driveway. With the report we will send signed contract, transfer, mortgage deed (if app) and inland revenue form.  All of these documents will have to be signed and sent back together with the clients’ deposit which is 10% of purchase price (although some will accept 5%) (if there is a dependant sale then we will use the deposit coming up the chain).  Once all of this is back we will

7. DISCUSS COMPLETION DATES

8. EXCHANGE

Once we have exchanged, we request mortgage funds (if applicable).  We will also carry out a Bankruptcy Search and Priority Search before

9. COMPLETION

After completion we will submit SDLT and once we receive the certificate for this we will register the property in the clients’ name and note the charge in favour of the lender.  We will send a copy of the office copies to the client and lender showing this.