Buildings Insurance
I am a first time buyer and I have found the home of my dreams, but I am a little confused. If I’m buying a new build home with a warranty, do I still need buildings insurance? – Laura Mitchell
FTB says: Yes, you’ll still need to arrange buildings insurance. While a warranty provides useful protection, it’s not a replacement for buildings insurance. Warranties cover issues related to the construction of the property, meaning the developer or builder is responsible for fixing defects that arise from their work. However, warranties don’t cover unexpected events outside the developer’s control, such as fire, flooding or subsidence. That’s where buildings insurance becomes essential, as it protects the structure of your home against these risks. In fact, if you’re taking out a mortgage, your lender will almost certainly require you to have buildings insurance in place. If you’re purchasing a leasehold property, such as a flat, buildings insurance is usually handled by the freeholder. But if you’re buying a freehold home, it’s typically your responsibility.
DIP and AIP
I keep hearing about something called a Decision in Principle when applying for a mortgage. Is this different from an Agreement in Principle, and do I need one before I start viewing properties?
Daniel Harper
FTB says: A Decision in Principle (DIP) and an Agreement in Principle (AIP) are different names for the same thing. This is an early step in the mortgage process where you provide a lender with basic information about your finances and what you hope to borrow. The lender will carry out a credit check and indicate whether they would be willing, in principle, to lend to you. A DIP or AIP is not a formal mortgage offer, and you’re under no obligation. However, it does give you a clearer idea of your budget and can make you a more attractive buyer in the eyes of sellers and estate agents.
Having one in place before you start viewing is a smart move, as it shows you’re serious and financially prepared.
Trustworthy Developers
I’m considering buying a new build home, but I’m a bit nervous about being the first person to live in it. How can I make sure the developer is trustworthy before I commit?
Rishi Patel
FTB says: Buying a property that’s been standing for years can feel reassuring, you can see how it’s held up over time and ask the owner questions. With a new build, you’re placing a lot of trust in the developer to deliver a high-quality home, often before it’s completed. That’s why doing your homework on the developer is essential. Start by checking reviews from other buyers. Platforms like HomeViews allow homeowners to share their experiences of developers, management companies and developments. The Home Builders Federation also publishes rankings based on customer satisfaction surveys, giving you a sense of a builder’s reputation.
It’s also worth confirming whether the developer is signed up to an industry code of standards. In the UK, the main ones are the Consumer Code for Home Builders and the New Homes Quality Code. Membership means the developer is expected to meet standards of build quality and customer service, and gives you added protection. Finally, make sure to check the warranty.
How much is it worth?
When buying my first home, should I always offer the asking price, or is it all right to offer less? How do I know what a property is really worth?
Emily Carter
FTB says: It’s important to remember that a property’s asking price isn’t always the same as its true market value.
Sellers aim to achieve the highest price possible, so the asking price is often set with room for negotiation. In many cases, this means you may be able to make an offer below the asking price. However, in desirable areas where properties rarely come on the market, homes may sell for the asking price or above it.
To make a well-informed offer, research recent sales. Looking at what similar homes have sold for will give you a clearer picture of value. It’s also worth checking how long the property has been on the market. If it’s been listed for a while or the price has already been reduced, the seller may be more open to negotiation.
First Time Buyer is an exciting bi-monthly glossy which takes a stylish and comprehensive look at all the options available, setting them out in an entertaining and informative way, and helping potential customers navigate their way through what is often a daunting and complex process. We dispel the myths, reinforce the facts and arm the reader with the tools necessary to make their homeownership dreams a reality.
