New build homes can take months to finish, and for some housing projects it becomes the norm for the developers to have a delay.
Delays are actually relatively common during new home construction in the UK. They can happen for a variety of reasons, from a lack of materials to poor weather. Dealing with delays can also add to the challenges of an already stressful process. No one wants to change their moving in plans once their heart is set on a particular day.
If the completion time does gets moved back, you may need to make different living arrangements or reapply for a mortgage.
The good news is that you can prepare for all of this long before this might occur.
Why Do New Build Homes Get Delayed?
The average completion time for a new home in the UK is between 12 to 20 weeks.
Here are some of the most common reasons for a delay on completion of a new home:
- Poor weather
- Lack of materials
- Labour shortages
- Inexperienced builder
- Poor planning
- Short deadline
Poor Weather
Most of the work involved in new home construction occurs outdoors. Builders are at the mercy of the weather, which may not always work in your favour. UK weather is particularly unpredictable, and with more extreme weather each year from climate change this is set to be a pattern for the future.
Unpredictable weather is also one of the main reasons house builders try to build more developments in the dryer months of the year. For example, unusually heavy rainfall in the autumn or winter may force a builder to hold off on certain tasks. Peak housebuilding in the UK is between May and September.
Lack of materials
A lack of materials or equipment may keep a builder from completing stages of construction on time. Unfortunately, many builders in the UK are struggling to acquire materials due to supply chain issues across the construction sector following the COVID outbreaks.
When COVID hit the planet, many businesses and factories completely shut down. No one knew it would last as long as it did. And many were not predicting regular people to have more income from working at home. For many the extra funds were used to redecorate their homes or commence building projects. Combine the increased demand coming from workers with the reduced supply coming out of the factories, and this created a global shortage of building materials.
Some housebuilders have had to wait much longer than planned to get certain materials, leading to an overall delay. And any delay they have gets passed onto the customer.
Labour Shortages
Many areas of the UK are also dealing with labour shortages. Fewer workers mean the construction of your home may take longer if the builder does not have enough help. In fact Bellway (one of the largest UK housebuilders) announced a shortage of materials and workers was holding back construction of homes.
Inexperience
Working with an inexperienced builder is another common reason for delays. Builders with less experience may spend time correcting mistakes and face setbacks due to a lack of planning.
Believe it or not – this is actually a good outcome. There are many cases where builders simply continue with a job even though there are errors along the way. But with a new build home there is a NHBC guarantee that brings you some peace of mind that your home will be built safely.
Poor Planning
This is mainly a point about individual builders instead of building companies.
Builders are good at building. They are not PAs, office workers, logistics managers or anything else that requires significant forward planning.
Most individual builders are also self-employed. They have to win their own work throughout the year. This means that builders normally don’t turn work down unless it becomes impossible for them to do. They would prefer to have building jobs to fall back on in case one doesn’t happen.
Some builders are too eager to get a job done and may choose an unrealistic closing date. A builder that promises to complete a home in an unusually short timeframe is less likely to meet the deadline.
Are New Build Homes Frequently Delayed in the UK?
The New Homes Review found that approximately one in three new build homes were not completed on time in the UK.
Delays are a problem among both small and large builders. Bigger builders often set ambitious deadlines that builds in little slippage time. Smaller builders tend to experience different challenges like obtaining materials and labour.
What Are the Risks of Having a Building Delay?
The biggest risk of dealing with a delayed build is not having somewhere to live when the time comes to move.
What Happens on Completion Date
Builders will normally give buyers notice of the upcoming completion date, giving them time to arrange their finances. You may need to sell your current home or vacate a rented home before the closing date. However, if the completion date is later delayed after you have made arrangements, you could end up without a place to stay.
Bridging the gap between leaving your current residence and moving into your new home may also require you to get a short-term lease (or most likely an AirBnb if it is a few days delay). Either way, these options come with higher costs. You might also need to pay for storage for your furniture and valuables as you wait for the closing date. The cost of renting a flat and separate storage space can quickly add up. If you do need to store items for a short time period we would recommend Safestore and their flexible storage options.
In a worst case, major delays for new build homes may require you to reapply for a mortgage, as most mortgage offers are only valid for 6 months. Reapplying for a mortgage can result in different terms compared to your initial application. You may end up with higher interest rates and need to pay application fees a second time.
How to Reduce the Risks If Your Home Build Gets Delayed
Buyers can reduce the risk of delayed new home builds. However, many of these recommendations need to be in place well before construction starts:
- Obtain a new home warranty
- Use your own solicitor
- Take out a new build mortgage to cater for any delays
- Include a long stop date in your building contract
- Commit to the design specifications
- Read reviews
- Check the NHBC survey results
Obtain a New Home Warranty
A new home warranty can offer protection if your new home build is delayed. NHBC is the UK’s largest standard setting body for new homes as well as offering warranties and insurance.
Although some developers do not offer a warranty on new build homes, many do because lenders normally require one in order to approve a mortgage. Beware if other warranty providers are used instead, as many will have their own sets of building standards (some could be better, some could be worse).
NHBC offers the well known Buildmark Cover for homes. This protects a buyer’s deposit up to the lower of 10% or £100,000 if a developer goes into liquidation or if the build timeline is unreasonably delayed.
Use your own solicitor
It may be tempting to use the solicitor recommended by the house builder, but we would always recommend you choosing your own solicitor that does not have any existing agreement with the developer of the project. The builder may be able to get you great rates to use their in house solicitor, but this does open up a tricky situation. If a solicitor is being paid by the developer, there is inevitably going to be an incentive to ensure house purchases go through (or they won’t be hired by the builder in the future). Having your own separate solicitor means none of this becomes a risk.
Get a New Build Mortgage
Most mortgage offers tend to be valid for 6 months (although every situation can be different). This can be an issue for new build homes, because a purchaser may find the completion date on a property gets pushed back beyond the 6 month validity period for the mortgage. If you’re in this situation – it can be stressful.
With a regular mortgage like this, you will probably need to reapply for the mortgage again. The terms of the new mortgage could be very different to the first one, including the interest rate charged.
Lenders are aware of this and some offer specific new home construction mortgages. These can have longer validity periods. But with this benefit there can also be drawbacks. Interest rates can be higher on these mortgages and the LTV ratio will also be lower.
Some mortgage contracts include specific steps for dealing with delays, which may keep you from needing to reapply. For example, you may need to provide written notice of the delay and request an extension on finalising the mortgage contract. Avoiding the need to reapply saves time and money, as you may not need to repay the application fees.
Obtain a Building Contract with a Long Stop Date
Building a new home typically requires you to pay a deposit and sign a contract with the builder of your choice.
A long stop date is a date that you and the builder agree upon as the latest completion date for the project. If the home is not completed by the long stop date, you can cancel the contract and exit the home purchase.
This also works on the developer’s side too – i.e. if you were not able to purchase the home by the longstop date (and we assume the home is ready) the builder could take action against you.
So a contract with a long stop date can offer extra protection against delays for both sides.
Commit to the design specifications
Most house builders allow for the buyer to customise different parts of the home. This can range from different flooring, kitchen fittings, electrics, plumbing and many other items.
Provided you pick these design parts early on, this should not cause a delay to the build process. However if you do change your mind later on, this can impact the timeline of the development (and might not even be possible if the builder has moved workers off site).
Each modification is likely to cause a further delay.
Compare Home Builders and Review Their Track Records
Along with these suggestions, ensure that you hire the right builder. Inexperienced builders are more likely to face delays during construction. Compare your options and read reviews from past clients. Reputable builders should also be willing to provide references, allowing you to verify the quality of their work.
If you know any friends or family who use the same developer, see if you can pay a visit to their home to see the build quality.
Check the NHBC survey results
Each year the NHBC releases the results of their home survey that is taken by many new home buyers. This gives you valuable information into how the house builders have performed and how satisfied home buyers are.
Conclusion
In the end, builders cannot guarantee that a new-build home will be completed on time. Unexpected setbacks can occur during any project. Yet, you can take steps to minimise the impact of delays.
But if you keep these tips in mind you should be able to protect your risk in the future.