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Do not purchase a New Build Property without first reading this....

Buying a property which has yet to be built, or which is newly constructed should be approached with care and here are some tips which will help:

  • Remember those friendly and helpful people within the sales offices are sales people and are no different from those people who you would find in car and double-glazing showrooms.  They are paid on results and work under the pressure of targets.   Once they have you signed up they will be your best friend and be in regular, sometimes daily, contact until they have collected all of you money.   There are many instances when this shadowing could be conceived as harassment.
  • At the outset you will be asked about whether you have a mortgage and a solicitor to undertake the legal work.   You will be steered towards making use of the developers preferred brokers and solicitors.  These are ‘partners’ who have been chosen to work with the developer as the developer expects those partners to report to them regularly and to do all they can to ensure the developer meets its sales targets.  The sales team will push you to use these partners often saying it will be less expensive and a lot quicker.  More than often it is not.  I have heard of a case where a potential purchaser who was insisting on using her own solicitor was told she could only do so if the developer’s head office permitted it!
  • The use of the developers preferred partners should be avoided for several reasons
    • How can you guarantee that the preferred partner is not acting with only you best interests at heart?  The ‘tie in’ with the developer could lead to a conflict of interests.
    • You may not be getting the best deal in town.   Your may be able to get a more competitive fee/mortgage product elsewhere if you were able to shop around.
  • Make sure before you sign the reservation form and part with your hard earned cash that you seek legal independent advice because once signed you may if you withdraw lose your reservation fee. 
  • Many developers are selling more properties on the back of the Government’s Help to Buy Scheme.    This is a gift from heaven for some sales teams as is makes the sale that much easier.  Beware however of signing up before understanding fully the ins and outs of the scheme.  I doubt many of those selling understand the scheme and are failing to provide any or an adequate explanation of its workings at the point of sale. For further information visit here:
  • There are other important aspects of the purchase which you may not be told about at the time you are asked to sign the reservation form

    • If it is a leasehold flat you will be required to pay an annual service and ground rent charge even if the estate is not fully developed. This can amount to an extra payment of £200 – £1000 each year.  The ground rent charge is likely to be reviewed and increased from time to time. Make sure you understand the basis of the review.
    • If its not a flat you may still be required to make a contribution towards the cost of maintaining shared facilities such as a play area for example.
    • You will be required to pay a contribution to the cost of the developer’s legal costs even though the documentation is on a word processor and takes little effort and resource to produce.
    • It is unlikely that you will see your final completion statement detailing extras and other expenses until a few days before you complete making it difficult for you to query figures.
    • There is a date by which you must exchange otherwise you will lose your reservation fee. Make sure you are happy with this deadline.
    • The contract and other legal papers you will be required to sign are looked upon as ‘closed’ meaning the developer will generally not allow your solicitor to make any changes to the provisions it contains.  

In conclusion my advice is as follows:

  • Always take independent legal advice on the legal aspects of the purchase before signing a reservation form and handing over the reservation deposit.  If in doubt see if you can agree a reduced deposit so as to minimize the penalty if you have to pull out before signing the contract to purchase. 
  • Resist the pressure and tactics deployed to persuade you from the using the developers preferred legal or broker partner and make a free choice on the advisor you choose to look after your interests.
  • Make sure the sales person tells you all about the Help to Buy scheme if it applies and also about all hidden costs such as service charges.
  • Find out before you sign what other building is to take place around the plot you are purchasing and when will the whole development be concluded.  Ask also about the developer’s policy on Social Housing and where this part of the development is to be based.  These are important factors since they could impact on you use and enjoyment of the property.

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at


Anonymous said…
This is a very useful article. I wish I had seen this before parting with £5000.00 'reservation fee' for a flat. I changed my mind within 3 days of paying the fee but still I am told that I cannot get my money back. Be warned, readers. I could do wonders with that £5000.00 now but it is in someone else's account.

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