There are various stages to purchasing a property before it is fully constructed, and collaboration with your solicitor is key to ensure seamless progression with the New Build Conveyancing timeline.
Prior to exchange of contracts, your solicitor negotiates on your behalf and reports to you on the legal documents for your purchase. On the date of exchange, you become legally bound by the contract, and proceed with the following stages until your New Build Property is ready to move into.
Immediately following exchange, you should diarise the timescales which are set out in your contract, to ensure you are prepared for each.
Key dates to note include:
Approximately one month before your stage payment is due, you should contact your solicitor to provide updated source of funds documents, so you may send the stage payment to them.
Solicitors are obligated to complete due diligence checks for each payment towards your purchase. You should provide the documents in plenty of time and highlight any changes in your source of funds to your solicitor as early as possible.
If you are obtaining mortgage finance, you should begin this process approximately six months before the Estimated Completion Date. Although most mortgage offers are valid for six months, some Lenders may allow up to twelve months for newbuild properties, to accommodate for potential delays.
Once construction is complete and Building Control has given their approval, the developer will give you ten working days to complete the purchase.
It is recommended to inspect the Property in person before completion, to ensure any snagging issues are raised with the Developer.
You will sign your final Lease and Plans which, dependent on the Developer’s preference, may be signed electronically or in ink. Once source of funds checks are complete, you should organise the purchase balance to your solicitor, with any stamp duty and legal fees payable.
You should note that if you do not complete within the 10 working days, the developer will charge you a daily interest at the rate set out in your contract, often 4% above the Base Rate. The developer will also have the right to terminate the contract, keep your deposit and stage payments, and sue you for damages.
Your solicitor will deal with the payment of Stamp Duty Land Tax and the registration of your lease at the Land Registry. They will also activate your New Build warranty, which remains in effect for ten years following completion. You should keep these documents safe to pass on if you come to sell the Property.
The Land Registry has extended processing timescales for new Leases, which currently average 10 to 18 months. Be assured, once your Land Registry application is submitted, it is “priority protected”. This means your application takes priority over any subsequent applications lodged against the title after yours. Nevertheless, it is not easy to expedite a new lease application as the Land Registry would have to deal with every prior application to yours.
Purchasing a New Build Property is an extensive but gratifying process. Good preparation and communication with your solicitor are vital to achieving the most successful, yet smooth conclusion.
At Quastels, we take a collaborative approach to ensure buyers are included in the process and have a positive experience throughout the stages of the New Build Conveyancing timeline.
Read MoreFor individuals holding pre-settled status under the EU Settlement Scheme, purchasing property in the UK may offer distinct financial advantages, particularly regarding Stamp Duty Land Tax (SDLT).
One of the most significant benefits is the potential to mitigate the additional 2% SDLT surcharge applied to non-UK residents. This exemption can represent substantial savings, particularly in high-value transactions, and provides pre-settled status holders with a financial edge in the competitive UK property market. Unlike other foreign buyers, those with pre-settled status could be treated as UK residents for SDLT purposes provided that they have spent 183 days in the UK in the year before completion. This will assist in reducing overall costs and allowing more capital to be directed towards the purchase or investment. If you don’t quite make up the 183 days before completion, you can claim a refund of the 2% payment if you spend 183 days out of a period of 365 days in the UK in the first year after your completion date.
This advantage, combined with the stability pre-settled status offers in accessing competitive mortgage products and navigating legal requirements, makes it an attractive position for property buyers. However, expert legal advice is essential to ensure eligibility and compliance with SDLT rules, safeguarding these savings while streamlining the purchasing process.
For those with pre-settled status, understanding and leveraging this exemption can be a pivotal step towards securing a future in the UK property market while minimising costs.
If you require immigration advice, please contact Jayesh Jethwa using the form below. If you require residential real estate advice, please contact Meera Malde using the form below.
Read MorePreparing to sell your leasehold property? Here are five tips to kickstart your sale process.
The importance of finding your perfect match cannot be overestimated. The human factor is at the core of a seamless and transparent process. Good practice is to follow recommendations from friends and family (or your agent), review firm’s/lawyer’s website/profile, and of course compare quotes and establish the law firm’s usual response and transaction times. I would always recommend speaking with your solicitor prior to instructing them: a video call is a good starting point especially if you are based overseas.
If your property is a flat in a high-rise block, the recent legislation called the Building Safety Act 2022 (BSA 2022) will require you to serve a leaseholder deed of certificate (your solicitor will advise you, if required and will assist in preparing the document). The leaseholder deed of certificate is served on your landlord, and the landlord will in turn have four weeks to prepare their landlord’s certificate. The leaseholder deed of certificate will confirm whether your lease qualifies for protections under BSA 2022 (with respect to fire safety remediation works). It is therefore good practice to complete and serve the deed even before you have a buyer.
Your solicitor will provide you with Law Society forms to complete and provide the relevant documentation referred to in the forms. These forms consist of standard questions about your property and must be completed by the seller. If you have questions on the forms, it is advisable to raise these at early stages of the sale process.
Will you require a certain period between exchange and completion? Inform your lawyer at the start of the process. Would you prefer to exchange and complete on the same day? Your lawyer can propose this to the other side. Or are you planning an overseas trip, and your Internet connection may be on and off — do let your lawyer know beforehand, and we can make sure you sign sale paperwork before the trip, or agree digital signing with your buyer, not to delay the process. As always, communication is key, and this works both ways.
Sales and purchases are a stressful process but good preparation and working with a good team can ease the worry.
Nargiz Abdullayeva is a Senior Associate in our Residential Property Team. Nargiz has over 8 years of experience in high-value real estate transactions. To discuss any of the points raised in this article, please contact Nargiz Abdullayeva or fill out the form below.
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