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New build delays are common but the impact can mean undue stress and huge additional costs. Here's what to do to avoid new build delays and your options if it happens to you.
When you buy off plan, you’ll usually have 28 days between reserving a property and needing to exchange contracts. In a normal buying process, the completion date is set in stone when you exchange. But with new builds it’s different in order to take into account potential new build delays.
So in your contract there should be:
However the long stop completion date is often six months after the anticipated legal completion date. So if the developer or estate agent tells you your home should be ready by March, it could be that the long-stop date in the contract – and the date it actually ends up ready – is November.
The developer should be clear about the long stop date but your conveyancing solicitor should also advise you about the long stop date.
If you’re not happy with the proposed timescale it’s in your interests to negotiate it – make sure it falls before your mortgage offer expires, read on to find out why. You won’t be able to pull out and get your deposit back until it looks like it won’t be finished until after the long stop date. And if a long-stop completion date isn’t in the contract, make sure you get one agreed before you exchange. Some developers cite a “termination date” instead of a long stop deadline. After this date, customers who still haven’t moved in can cancel their contracts without forfeiting their deposit.
When you buy a new-build home from a developer, you’ll find the contracts are heavily weighted in their favour. So when you instruct a solicitor or conveyancer it’s important to choose one that has experience of working on developments like yours so they know the questions to ask. Don’t be pushed into using the developer’s recommended solicitor. Your solicitor should be representing your interests but this could be more difficult if they receive a lot of business from the developer. Read more in our guide on New build conveyancing.
Then, ask your conveyancer to check the long-stop completion date. And ensure the long stop date falls before (or even on the day) your mortgage offer expires. Read on for why this is important.
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The consequences of new build completion delays can include:
If you experience new build completion delays you may have to pay huge amounts in temporary accommodation costs. Many people buy new builds in good faith, expecting to move in on the date the developer told them when they exchanged contracts, only to be faced with new build completion delays of months or even longer and realising there’s little they can do about it as the developer is covered by a long stop date.
So it’s essential to think through how you would manage new build completion delays if this happens to you.
One of the biggest potential consequences of new build completion delays is if your mortgage offer expires. Most mortgage offers are valid for 3-6 months, although some lenders have longer offer periods for new builds.
If you’re facing new build completion delays and think your new home won’t be ready within the period of time your mortgage offer is valid for, you may be able to get the lender to extend the offer. But you’ll usually have to go through the mortgage application process again. It could cost you more on your mortgage payments each month if you can’t get as good a rate.
However, in cases where buyers have failed to complete because their mortgage offer has expired and they have been unable to get a new mortgage offer, not only have they lost their deposit, developers have been known to sue them too.
Top tip: One way to avoid this happening to you is to negotiate to ensure the long-stop completion date falls before (or even on the day) the mortgage offer expires. That way you can pull out if you wish with no penalties.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
If new build completion delays mean the property is not ready by the long stop completion date you can either:
Again, if you choose to continue with the purchase and need a mortgage you should check first when your mortgage offer expires.
Whether or not you can get new build completion delay compensation isn’t clear cut unless it’s written into your contract.
Top tip: Ask that a form of new build completion delay compensation is written into your contract before you sign.
However, if this isn’t written into your contract and if your new build home is delayed beyond the long stop date and you don’t want to pull out, you can complain to your house builder. And if they don’t offer a satisfactory response you can escalate your complaint. You should be able to find details of the developer’s formal complaints process on their website.
The completion date is only legally binding when the home is ready and a “completion notice” is served. After which buyers usually have between 7 to 10 days to pay up or face interest charges on the balance.
Beware: if you’re renting a property, depending on the notice period you need to give you may end up paying rent and mortgage at the same time.
There are other issues when it comes to getting a new build mortgage. The usual timeframe of 28 days to exchange can be challenging for mortgage lenders.
Also, mortgage lenders are often a lot stricter on the amount they are willing to lend on the purchase of new-builds. The loan-to-value ratio for new build mortgages is also often tiered, with lenders prepared to loan you less for a new build flat than a new build house. But this differs according to lenders, it’s a good idea to speak to a mortgage broker as they will know each lender’s criteria. For more advice on buying a new build home read our guide
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
Snagging issues are very common: 95% of new build buyers reported problems to their builder since moving in, according to the Home Builders Federation National New Homes Customer Satisfaction Survey published in March 2024. It could be a scratched window or a door that won’t close. Or something more serious or even structural.
We advise getting a snagging survey done. A professional inspector is likely to spot more defects than a homeowner. Plus, they will create an independent snagging report, can liaise with your house builder on your behalf and push for the defects to be fixed.
But here at the HomeOwners Alliance we also think house builders need to do more to get new build homes right first time. That’s why we are campaigning for a snagging retention fee. Find out more about our Snagging Retention – Campaign for Change here.
A new build home warranty is essentially an insurance policy for newly built homes. It’s taken out by the developer but is in place to protect you, the buyer (and your mortgage lender). These warranties typically cover you for defects that arise due to faults in the design, workmanship or materials that remain undiscovered at the time of practical completion on your new build.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
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