Your guide to buying a new home

The process of buying a new home – especially a new-build home that’s waiting for you to put your stamp on - is an incredibly exciting time.

That said, it’s the biggest purchase you’re ever likely to make, so it’s a good idea to know what to expect and to do what you can to make sure the process of buying a new build goes as smoothly as possible.

In this section:

• Do your research
• Make the most of incentives
• Get your funds in place
• Arrange a mortgage in principle
• Start your search
• Reserve your home
• Exchange contracts/conclude missives
• Organise insurance and utilities
• Complete and move in

Do your research on the costs of buying a new home

First things first, research what properties cost in your chosen location and compare this to the funds you’re going to be able to raise. These will include your deposit and what you’re able to borrow from a mortgage lender – typically four and a half times your salary (or joint salaries – if you’re buying with a partner or friend).

Then use a mortgage calculator to get an idea of what your monthly repayments are likely to be and whether – based on all your other expenditure – you can afford them. You don’t want to be paying so much that you can’t afford life’s little luxuries occasionally as well! You might even want to reach out to a mortgage broker at this point, since they will be able to give you a realistic idea of what properties are within your budget.

If you can’t make the sums work, it doesn’t necessarily mean the end of your dream – there are some excellent schemes in place to give you a helping hand, which we outline below. We can also recommend independent financial advisers who will talk you through the different options available to you, before guiding you through each step.

Make the most of new home schemes

In England, as a first-time buyer purchasing a new-build property, you could take advantage of the government-backed Shared Ownership scheme, which is great if you can't afford the full purchase price of your home straight away.

If you’re planning to step onto the property ladder in Scotland, the Shared Equity scheme is another way to keep both your deposit and monthly payments to a minimum. With the scheme, you fund between 60% and 80% of the property price while the Scottish Government loans you the remainder. 

Other popular ways to buy new include Part Exchange – which saves you the bother of having to sell your existing home yourself – and schemes that support you with the buying process, so you can purchase your new home hassle free. At Places for People, we call this Easy Move.

Mortgage Contribution schemes are also available at some developments for first-time buyers and current homeowners alike. This is when a house builder rewards you with a financial boost towards your mortgage in return for buying your new home.

Get your home-buying funds in place

Unless you’re lucky enough to be gifted your deposit, you’re going to need to commit to a regular savings plan to raise the funds you need. If you’re between 18 and 40 and buying your first home in England, the Lifetime ISA lets you save up to £4,000 each year, with the UK government adding a 25% bonus, up to a maximum of £1,000 per year.

When saving, you should factor in all the other costs associated with buying your new home, such as solicitors and removals along with new furniture and other household essentials to kit out your home. If you need some help in this area, Mortgage Advice Bureau’s MyMAB app lets you create and keep track of your own tailored savings plan.

The good news is that when you’re buying a home for the first time, there are concessions in terms of Stamp Duty (England) and – in Scotland – the Land and Buildings Transaction Tax (LBTT).

First-time buyers don’t pay Stamp Duty on homes priced up to £425,000 – and for homes priced up to £625,000, Stamp Duty is just 5% of the amount over £425,000. In Scotland, first-time buyers can claim a tax relief of up to £600, which means you start to pay LBTT at a higher-than-normal threshold – on homes priced over £175,000.

If you’re an existing homeowner, Stamp Duty is waived up to £250,000, with 5% payable on any higher amount (up to £925,000). In Scotland, LBTT is payable on property values over £145,000 – at 2% of the portion to £250,000, 5% of the portion between £250,001 to £325,000 and 10% of the portion between £325,001 to £750,000.

If you’re buying new with Places for People, you might want to advantage of our Stamp Duty / LBTT Contribution scheme, which helps to make the costs of moving more affordable.

Arrange a mortgage in principle

You should start the mortgage process to receive a ‘mortgage in principle’ as soon as you decide to buy your new home. A mortgage in principle confirms the amount a lender is willing to give you, which means you’ll know for certain how much you can afford. This could help speed up the process and put you at an advantage ahead of other prospective buyers.

Processing your mortgage application – including carrying out the necessary identity, employment and credit checks – can take as little as a day, providing there are no issues, otherwise a few days at the most. At this point, you’ll receive a ‘mortgage in principle’ – lasting between 30 and 90 days – and will be in a good position to reserve your new home.

Your mortgage application can then progress and – providing all is well – you will be made a formal offer by the lender. Find out more about new build mortgages.

Start your search for a home to buy

Once you’ve agreed how much you can borrow, you can then start the search for your new dream home. Our developments are located at prime locations across the country – handy for local amenities, schools and transport links but also close to attractive green spaces where you can easily take time out in nature.

To help you get started, on each development’s page we’ve included the available homes and prices, key property features, floor and site plans, and useful information about the local area. You’ll also be able to view interiors and exteriors as well as virtual tours, which help to convey the spaciousness of our homes and how easily they adapt to different buyers’ needs.

If you’re not sure where to start, or you need some help refining your choices, one of our sales executives will be happy to talk you through the different options. Better yet, book an appointment to come and see us – and your new home – in person! That way you can explore our developments first-hand and be certain you’ve made the right decision about where to put down roots.

Reserve your home

Once you’re happy you’ve found the home of your dreams, you can reserve your chosen plot and pay the required reservation fee to secure your home – your sales executive will be able to advise you on the amount.

You should also contact your mortgage lender or IFA to let them know they can proceed with your mortgage application. Once you receive – and accept – your official mortgage offer you’ll then need to instruct a solicitor to act on your behalf and undertake the conveyancing process for you.

Conveyancing covers everything that needs to happen to ensure the legal transfer of home ownership from the seller to you. It includes things such as drafting contracts and conducting property and local authority searches to check everything’s in order.

There are normally two stages to the conveyancing process: the first is the point at which the terms of the deal are fixed (known as exchanging contracts in England and concluding missives in Scotland); the second stage is completion, where the legal title passes.

Exchange contracts/conclude missives

Exchanging contracts (England) and concluding missives (Scotland) is the last step in the buying process and the point at which the sale/purchase contract becomes legally binding.

In England, the final contracts are ready once your solicitor has carried out all the necessary searches and you’re happy with the terms. You and the seller will sign a copy of it and the contracts will then be exchanged.

Under Scottish law, your contract will be legally binding once missives – the series of solicitors’ letters that constitute the contract for the sale of property from seller to buyer – are concluded.

Your contract will include an anticipated completion date, which is the date the property legally becomes yours. You’ll need to pay your deposit now – as well as any other required costs – as well.

Throughout the buying process, we’ll stay in touch at every step to make sure things go as smoothly as possible.

Organise insurance and utilities for your new home

Once everything’s signed and sealed, your mortgage lender will ask you to get buildings insurance to cover your new home against damage, which needs to be in place from your completion date.

You’ll also need to organise contents insurance for your belongings and potentially life insurance as well – to protect you in case of unexpected events.

Moving into a new home is an exciting but hectic time so being organised is key – the more things you can put in place now, the better.

A definite for your ‘to do’ list is setting up or transferring accounts for TV, internet and utilities suppliers ready for when you change address.

Some other things to think about are arranging removals quotes and providing notice to your landlord if applicable, setting up mail forwarding and registering with a local doctor and dentist.

Complete on your new home and move in

Legal completion is that happy moment when you assume ownership of your new home! Sometimes exchange and completion happen on the same day, but usually exchange happens first.

At this point, your mortgage lender releases the money to pay for your new home – this is when you will pay your other remaining costs such as Stamp Duty and solicitors fees. Once your solicitor receives the title deeds, they will register you as the new homeowner with the Land Registry/Land Registers of Scotland.

As soon as you’re ready to move, we’ll arrange for you to attend your new home demonstration – a great opportunity to get to know your new home. We’ll show you important things such as how to operate the central heating and other appliances, and give you lots of advice on keeping your new home in tip-top condition – all of which are included in your home user guide.

It’s also when the really fun bit happens – handover of your keys!

But we won’t just leave you to it. Once you’ve had chance to settle in, a member of our team will be in touch to answer any questions you may have and to make sure everything’s going well with your new home.

If you’re ready to start the process of buying a new-build home, why not browse our developments today?