Completion Date New Build

smurray89

Hi! I have reserved a new build off plan that will be ready for August 2021 
I want to benefit from the stamp duty holiday but if I can't complete until August next year then I miss the deadline 
Is there anyway to complete before it is actually ready in order to enjoy this benefit!? 
Many thanks, Sam 

davidmcn

smurray89 said:

Is there anyway to complete before it is actually ready in order to enjoy this benefit!? 

In theory yes you could hand over your money before they've finished (or even started) building the house. Do you really want to do that though? It's also going to be impossible if you're buying with a mortgage.

bucksbloke

You cannot complete in advance of building completion. 

OldMusicGuy

If this is with a mainstream developer, completion is in their hands. You have no control over it. They will issue a "notice to complete" once the house has been completed and has been inspected by NHBC or similar to signoff the guarantee. The notice to complete is the trigger for completion and you can't "hand over your money" before then, apart from the deposit. They cannot complete prior to inspection by the NHBC or whatever external body they use to back the guarantee they give. If completion is scheduled for August, it's almost certain they won't complete early enough for you to take advantage of the SDLT holiday.

If the new build is being done by a small local developer you might be able to come up with a way of doing this but I would tread very carefully. We were dealing with one such developer prior to lockdown and pulled out because we lost confidence in the way they worked. They wanted us to put substantial money into the house upfront and we felt it was too risky.    

sweetsand

bucksbloke said:

You cannot complete in advance of building completion. 

You can if you are a cash buyer  and that is a fact. The only risk is if the builder goes belly up or does not complete, your loss.

OldMusicGuy

sweetsand said:

You can if you are a cash buyer  and that is a fact. The only risk is if the builder goes belly up or does not complete, your loss.

We are cash buyers and certainly couldn't with our developer. They made it very clear to us that completion can only occur once the house has been inspected by the NHBC. They have no interest in taking our money before then.

We've been pushing them to complete our house as soon as possible (as we are stuck in rented) but it's very clear they are sticking to their schedule. 

sweetsand

OldMusicGuy said:

sweetsand said:

You can if you are a cash buyer  and that is a fact. The only risk is if the builder goes belly up or does not complete, your loss.

We are cash buyers and certainly couldn't with our developer. They made it very clear to us that completion can only occur once the house has been inspected by the NHBC. They have no interest in taking our money before then.

We've been pushing them to complete our house as soon as possible (as we are stuck in rented) but it's very clear they are sticking to their schedule. 

Having consulted one of my family aht has many properties and they have bought brand new properties I have not bought a off the plan property. They said I was wrong and new devlps cannot sell before completion in their experience so that ties in with what you have said. Even if some do which I doubt now your builder does not.
Apologies as I always buy built property and have heard about "buying off plan" but that is normal a deposit and possibly and tighter agreement but not complettion.

sweetsand

Having done a bit of research online - it contradicts me, and your builder. They say you can buy off plan as i intially assumed. However, it is down to the builder and as you know risks.

See link 
https://www.braybray.co.uk/can-i-buy-a-new-build-property-before-its-built/#:~:text=You%20absolutely%20can%20buy%20a,you%20can%20view%20in%20person.

RelievedSheff

Buying "off plan" usually refers to reserving your plot and paying your deposit not paying the full property purchase price.

OldMusicGuy

Absolutely. There are three stages to "buying" a new build. First, you reserve the property and pay a reservation fee. This is frequently done "off plan". Then you exchange, at which point you are committed to buying the house. Developers normally stipulate you have to exchange within 28 days of reservation. If buying "off plan", the house won't be built at this stage but you pay your 10% deposit. You are then committed to buying the house, and when you exchange the builder will give an estimated completion date and a "long stop" completion date (you can back out if they don't complete the house by the long stop date). So you don't pay the balance due until the house is completed, and this is what triggers the SDLT liability.

Mainstream builders will follow a repeatable process with standard ts & cs to keep their costs down. They do not like any variations to the process as it will increase their legal costs. So a buyer (even a cash buyer)  won't be able to just pay a load of money ahead of completion to trigger SDLT liability. A smaller builder might be more flexible, but there is risk with that.
 
Also, NHBC covers the buyer from exchange against the builder going bust, but only for 10% of the cost of the property (a typical deposit). So if a buyer did pay most of the cost prior to actual completion and the builder went bust , they are only covered for 10% of the cost of the house by the NHBC guarantee (or similar).

We are currently buying "off plan" from a small regional developer (not a big national one). They have about 25 houses under construction and they are completely inflexible on completion date - it is dictated by their build and completion schedule, not ours. We have asked many times for early completion as possible (which could be done as the house is pretty much finished now) but they won't budge, they are completing the houses in groups.

We were originally dealing with a small local builder who was building three houses. He was prepared to offer all kinds of funding options so we probably could have paid more up front with him (he was actually asking for it) but we were uncomfortable doing this because we suspected he had cash flow problems.    

AdrianC

Developers CAN sell part-built properties, then complete your property for you. Of course they can.

Whether they are WILLING to is another question entirely.