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New Home Jargon buster

The transfer of ownership of a contract.

A full inspection of the property, conducted by a chartered surveyor, who will write a detailed report setting out the soundness of a property and any property defects. Typically conducted for any house, particularly older properties and those that have been poorly maintained and therefore is not usually undertaken when purchasing a New Home.

A document that specifies the completion date for a new build property. It is the date on which the property becomes a dwelling for Council Tax purposes.

The Consumer Code for Home Builders gives protection and rights to purchasers of new homes, ensuring that all new home buyers are treated fairly and are fully informed about their purchase before and after they sign the contract.

The Code is designed to help Home Buyers who, on or after 1st April 2010, reserve to buy a new or newly converted Home built by a Home Builder under the insurance protection of one of the supporting Home Warranty Bodies.

A legal agreement between the seller and the buyer of a property, which binds both parties to complete the transaction.

The initial enquiries about a property put forward to a seller, which the seller must answer before the exchange of contracts.

The point at which signed contracts are physically exchanged, legally binding the seller and buyer to the sale and purchase of a property at the agreed price.

The date by which a purchaser must exchange contracts. Failure to exchange contracts within the stipulated time frame means the property may go back onto the market and you may lose your deposit and costs incurred by the seller, such as legal fees.

A sum of money paid by the buyer on exchange of contracts, less the reservation fee.

A type of ownership in which a person owns a property, but not the land on which it is built. The owner of the Freehold will grant a lease on the property for a specified length of time.

An amount of money advanced by a lender such as a bank or building society on the security of a property and repayable over a long period of time. It is important to consider the estimated completion date as a mortgage offer will typically be valid for a maximum of 6 months.

This is either a part or non-refundable deposit that will reserve a new home for a pre-agreed length of time, allowing the buyer a period of exclusivity to exchange contracts. During this time, the property will usually be withdrawn for sale and will not be subject to any price increases. The reservation fee will be deducted from the agreed sale price upon either exchange or completion of contracts.

An agreement made between the vendor and the proposed purchaser which sets out the terms of the proposed purchase including the price, tenure, reservation fee (holding fee), and the target exchange and completion dates.

A ‘search’ is when your conveyancer requests information from the local authority to confirm details about any planned developments, disputes or road works that may affect the property. They will also ask the local authority to confirm whether the property is likely to have been built on land previously used for mining or has a history of flooding.

Searches are carried out to discover additional information about a property that often isn’t obvious. They include things such as where planning permission may be granted for a future development that would negatively impact your property in the future, whether the property is liable to Chancel charges from a local church, the quality of the ground on which your house is built or details of common drains and access rights.

Paid by the owner to cover the cost of repairing and maintaining external and/or internal communal parts of a building (eg. heating, lighting, security, insurance, etc)

Where the freehold on which the property stands is owned by a limited company and the shareholders of that limited company are the owners of the property.

A government tax paid by the buyer of a property; the amount paid is dependent upon the value of the property. As the price you pay for a new property increases, so do the rates of stamp duty. You pay a percentage of the cost, and the rate payable increases at a set of thresholds - but, you only pay the proportion of the purchase price that's actually above the thresholds at the higher rate.

PURCHASE PRICE BRACKET

STAMP DUTY RATE - ON THAT PORTION OF THE PURCHASE PRICE

STANDARD

SECOND HOME

Up to £125,000

Zero

3%

Over £125,000 - £250,000

2%

5%

Over £250,000 - £925,000

5%

8%

Over £925,000 - £1,500,000

10%

13%

Over £1,500,000

12%

15%

A professional person qualified to estimate the value and condition of land and property.

A survey is not usually required when buying a new build property. Any structural defects would be covered by the warranty.

This is the process of visually checking a new home for minor faults that will be rectified by the developer prior to handover.

Conditions on which a property is held (ie. length of lease).

Documents showing legal ownership of a property.

An investigation carried out by a conveyancer or solicitor into the history of ownership of a property. The search will check for liens, unpaid claims, restrictions or any other problems that may affect ownership.

The Land Registry document that transfers legal ownership from seller to buyer.

A basic survey of a property to estimate its value for mortgage purposes. Mortgage lenders will insist on this before lending.

An insurance policy which protects buyers of new homes from structural defects, usually offering 10 years of cover.


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