Buying a new build during COVID-19

With the arrival of the First Homes programme expected later this year and the news that the English housing market has reopened, first-time buyers are wondering whether they can apply for mortgages and purchase New Build properties during Covid-19.

We’ve answered some common questions about the current New Build market and have listed some guidance below for upcoming buyers as well as information about the current and upcoming schemes that could potentially help you onto the property ladder.

Can I buy a New Build during lockdown?

There are a range of New Build properties across the UK that are currently available for sale. In England, the housing market re-opened officially on Wednesday the 13th of May, 2020, so those seeking to apply for a mortgage or buy or sell a home could proceed.

Can I visit the construction site?

New Build construction sites are now allowed to open as long as Government guidance is followed and the site is deemed safe for workers, visitors and the surrounding community. 

That being said, the process of purchasing a New Build property will naturally differ, meaning you may not be able to visit the development site, sales office or show home. 

This can be frustrating but developers have adapted to accommodate to the new situation with many providing virtual viewings. 

Buying a New Build off-plan during Covid-19

Of course, New Build properties are frequently bought off-plan so your chosen developer may be able to provide you with:

• Floor plans

• Samples of materials including flooring or tiles

• Marketing materials including brochures or digital flythrough videos

• Pictures of completed developments that have the same or similar specifications

How soon can I move into a New Build during lockdown?

There is a big emphasis on home building at the moment and with construction sites now open, developers are keen to make progress and complete projects to meet demand. 

The Government aims to restrict movement and interaction though the latest guidance does permit purchasers to proceed with moving if the property they have bought is vacant. 

This could be good news for those who are buying or have already bought a New Build as buyers benefit from not having to wait for a previous owner to move out.

Before Covid-19, most New Build buyers could expect to complete their purchase and move in between 3 to 6 months of having their offer accepted though as with any mortgage and subsequent property purchase, every situation varies. 

There are a variety of factors that could delay the process, including survey results, valuations and even the weather. Our advisors know the local and national New Build market well and can work with you to minimise mortgage delays wherever possible.

Could I get a low interest mortgage for a New Build?

The range of mortgage products has decreased in the UK as a result of Coronavirus but there are still lenders willing to provide New Build mortgages with attractive rates. 

Your ability to apply and successfully get approval for a low rate mortgage again depends on a whole host of factors but usually, lower rates are offered to borrowers with impeccable credit history and a low debt-to-income ratio. 

Don’t let that put you off though, specialist or niche lenders can be more flexible and our brokers may be able to find you an affordable New Build mortgage, even in instances of bad credit or low income.

What about green mortgages?

Although the range of green mortgage lenders is limited in the current market, there may be a handful of banks willing to offer more favourable terms, like lower interest rates, to owners of energy-efficient homes.

New Build properties are notoriously eco-efficient and this hasn’t gone unnoticed by buyers who benefit from cheaper bills and lenders who recognise that cheaper living costs reduce the likelihood of mortgage defaults. 

You can find out more in our green mortgage guide or alternatively, send us a message and we’ll get back to you with a clear answer, as soon as possible. 

Are there any schemes that could help me buy a New Build in 2020?

Potentially yes, though your eligibility for any New Build scheme depends on your own circumstances. If you’re unsure about whether you’d qualify for any of the schemes listed below, ask one of our advisors who can learn more about you and recommend the best route.

First Homes programme / Key worker scheme 

More details of this scheme are expected to come later in the year but what we know so far is that qualifying key workers and local first-time buyers will be able to purchase New Build developments at a reduced price. 

The minimum discount is 30% though local councils can take the decision to award more discount to make the purchase more affordable if necessary. 

Ask an advisor for more information or see our First Homes programme guide.

Help to Buy Equity Loan

The Help to Buy equity loan scheme is designed to help people onto the property ladder by lending qualifying first-time buyers equity loans up to 20% (40% for London) of the cost of a newly built property.

The borrower is required to put a minimum of 5% of their own deposit in, funding the additional 75% of the asking price with a mortgage. 

Help to Buy Shared Ownership

Help to Buy shared ownership allows buyers to purchase a percentage of a property and pay rent on the portion that they don’t own. 

Homeowners also have the freedom to purchase additional shares in the property in the future, which can make this route of homeownership more affordable for first-time buyers.

What are my next steps if I want to buy a New Build?

Before you even think of putting in an offer for a New Build, you’ll need to know how much you can borrow and whether there are any lenders willing to loan you the money on terms that are affordable for you.

That’s where we come in. We know the issues that can cause red flags for lenders and can recommend the lenders in the UK that are more likely to accept you as a borrower.