First-time buyer jargon buster

If you’re searching for your first home, you may not be familiar with some of the terminology used during the house buying process. 

Whether you’re in the early stages of house-hunting or have already started your house buying journey, we’ve explained a few of the most common jargon for first-time buyers.

Agreement in principle

When looking for your first home you’ll need to know how much you can borrow, in order to make an offer. To get an agreement in principle it’s very simple and just requires you to provide a few details over the phone, online or in person with a mortgage advisor. The amount shown on the Agreement in Principle is not guaranteed and is subject to a full mortgage application but gives you a rough estimate on how much you could borrow.

Avant can recommend to you a new build expert mortgage advisor, or you can choose your own. 

Exchange of contracts

This term refers to the process where the buyer and the seller sign contracts agreeing the sale of the property, making the sale legally binding. Once the exchange has taken place, you are legally committed to purchase the property. 

Completion 

Completion day takes place after exchange of contracts and when your new home is ready to move into. The time between exchange and completion is usually a week or two apart but can sometimes be on the same day. All you need to do is come and pick up the keys and the deeds will be sent to your solicitor.

Conveyancing 

Conveyancing is the legal process of transferring the ownership of a property from the seller to the buyer. 

Building’s insurance

When you buy a new home, you will need to take out building’s insurance. This insurance covers you if something happens to your home like a fire, flood or storm damage, to cover the cost of repairs, rebuilding.

Contents insurance 

You will also need to take out contents insurance for your new home, this covers you if something goes wrong like a burglary, leak or fire. You can make a claim to your insurer for any items that are lost, stolen or damaged. You can also add-on additional cover to protect accidental damage or items lost outside of your home.

Build stage

When buying a new build home, your house will be built in several different stages. It all starts from laying the foundations to the final touches of painting and decorating. On average, a new build home takes around 5 -7 months to build. 

EPC rating

EPC stands for Energy Performance Certificate and is a measure of how energy efficient your property is. All homes are ranked from A – G, with A being the most efficient. EPC ratings give you a good idea on how much the home running costs will be. 

All our new homes at Avant are jam-packed with energy efficient features to help you save money on your bills. Click here to find out more!

Ultimately, new build homes use far less energy than older houses; HBF research shows that 85%* of new build homes had an A or B Energy Performance Certificate rating, whilst less than 5%* of existing homes reached the same standard.

Council tax

Council Tax is a local taxation on domestic property, where each property is assigned one of eight bands based on the property’s value. The band is based on the value of your home on 1 April 1991. A different amount of council tax is charged on each band. You will usually pay in 10 instalments a year.

Mortgage

A mortgage is loan you use to help you buy a home. The average mortgage term lasts for around 25-30 years, during which you’ll make monthly repayments. When you buy your home, you’ll put down a lump sum deposit towards the property’s purchase price. The remaining cost will be paid for with your mortgage. Your monthly payments will include interest, which is what the lender charges for allowing you to borrow money from them.

Stamp duty

Stamp duty is a tax you might have to pay if you buy a residential property in England that is over £250,000, unless you are a first-time buyer. 

First-time buyers pay no stamp duty on properties costing up to £425,000. 

If you’re buying a home in Scotland, you will pay Land and Buildings Transaction Tax (LBTT) instead of Stamp Duty.

Options and extras

When buying a new build home, you have the opportunity to personalise it however you want. At Avant, we are proud to have a stunning range of options and extras so you can create a space that truly reflects your unique style and taste. 

You can choose from a beautiful selection of kitchen and bathroom upgrades, flooring, wall tiles, garden features, wardrobes, and everything in between, all carefully selected from trusted manufacturers.

Snagging

Snagging in new build construction is an essential process that ensures the quality and finish of a new build home. It involves examination of the property to point out any small defects or issues. 

Snags are the small imperfections left after the building work has been completed that don’t necessarily affect the structural integrity or functionality, such as minor scratches or uneven paintwork. 

Warranty 

New build homes typically come with guarantees that older properties don’t. 

The Avant Homes warranty provision is a 10-year warranty which includes a two-year builder (Avant) warranty from legal completion and a further eight years of structural defects insurance cover. Click here to find out more!

Home demonstration

Before you are due to complete on your new home you’ll be invited to a home demonstration, where you’ll be shown everything you need to know ahead of your moving in day, from how to use your boiler, to how to maintain your shower.

Searches 

Searches are completed by your chosen solicitor, who work with the local authority to find out any information about the property you are purchasing. There are usually 9 searches that take place, which include water searches and environmental searches. 

Tenure

The term tenure refers to the various ways that you can own a property. Typically, it can be freehold, leasehold, or leasehold with a share of the freehold.

CML 

Once your new home is build complete, the NHBC will carry out an inspection to ensure that your home has been built to the appropriate required standards. A CML certificate/warranty released cover note is awarded from the NHBC inspector, and your home will be granted a 10 year warranty.

Covenants 

Covenants are binding conditions that are written into your property’s deeds or contract, to determine what you can or cannot do with your house and land. They are designed to uphold certain standards for all residents. The most common examples include preventing owners from making certain alterations to the property or preventing businesses from operating on the land. 

We hope our jargon buster has helped you understand some of the common terminology used when buying your first home. 

If you want to find out more about the buying process of a new build home. Click here!

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