New Build - Legal Fees

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    New Build - Legal Fees

    Hi all,

    I am a first-time buyer and looking into buying a new build apartment as a BTL.

    The developer is offering to pay the legal fees of £900 on my behalf if I deliver a 10% deposit for the property.

    My question is whether it's "safe" to let the developer arrange the legal side of things? Is it better that I pay the fees myself and choose my own conveyancer?

    I don't want to save money in the short-term but get ripped off in the long-run if the developer-selected solicitor/conveyancer did not do a good job for me.

    I should add that the developer appears to be reputable with a long history in the business from the research I have done.

    Thanks in advance!

    #2
    Always use your own conveyancer - there's not really a guarantee that they'll be any better (most conveyancing is a check box exercise).
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Forgot to add one thing...

      Can I say "no" in totality to the £900 legal fees? They are selling it to me as though I have to pay it as a fundamental part of the purchase.

      Is it the reality that they are offering to source the services for me for £900? Or is there some mandatory part that I will have to cover regardless of whether I go off and find my own conveyancer?

      Thanks.

      Comment


        #4
        Ask them.
        It may be that if it's part of the price, you can fund it with the mortgage.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          Last time I heard of a developer offering to provide the legals (their own people) for free, it was in relation to houses with those rip-off leaseholds where the ground rent doubles every ten years.

          I'd personally only ever accept free legals from a lender in relation to a remortgage. Use your own solicitor/conveyancer.

          Comment


            #6
            Ask for a reduction of £ 900 in the sale price.

            Comment


              #7
              At this moment in time I would avoid buying a flat under any circumstances.
              Remember as a New Build you will be competing with othe investors at the same time for tenants and whilst there is always a small premium to be had from occupying a new unit just like cars this premium immediately evaporates and the rental may not be readily achievable in the next Let.
              Dont be lulled into believing that the Service Charge and Ground Rent are going to stay low , once complete it is quite common for the Freehold to be offloaded with the buyer setting out their own terms.
              If you are intent on buying a flat look with caution onthe second hand market.
              The above is my own professional view and others may rightly have a different take.

              Comment


                #8
                Thanks for the advice so far!

                Shopping around, I obtained 5 quotes online averaging at £1,590!

                Considering this is a new build apartment under £130,000 in value, it seems really expensive based on what I have seen suggested as typical costs online.

                Perhaps it's not so risky to use their own service for free (since they will waive the costs) versus paying almost £1,600 to use my own, for which there's not a guarantee that they will do a better job?

                Comment


                  #9
                  Just remember the firm being suggested receives more introductions from the developer than you give so if there is a dispute on the property on whose side will they act for. I have never ever trusted such incentives so caveat emptor.

                  Comment


                    #10
                    Originally posted by loanarranger View Post
                    At this moment in time I would avoid buying a flat under any circumstances.
                    I'm inclined to agree with this. If there's a wobble in the housing market, I reckon the flat market will be hit first/hardest. I don't know what it's been like where you're looking to buy, but here in Manchester they're throwing flats up absolutely everywhere they can - dozens of massive high rises, the highest is 64 storeys.

                    Be very careful - and do your research. I've just searched City Centre Manchester for studio/1 bed/2 bed flats ... 2,738 available, and there's quite a few showing as reduced - over 100 are showing as either added or reduced yesterday alone.

                    I also think that you could possibly see the day when you regret not spending an extra £700 to use your own conveyancer.

                    Comment


                      #11
                      Any condition in a contract restricting a purchaser from using a conveyancer of his choice is void (Section 48 Law of property Act 1925).

                      It is in any event a very bad idea not to use a totally independent conveyancer on the purchase of a leasehold property.

                      Comment


                        #12
                        Originally posted by loanarranger View Post
                        At this moment in time I would avoid buying a flat under any circumstances.
                        Thanks for your input! Your advice seems more geared towards avoiding new build leasehold flats at any cost though (and perhaps at any point in time). Is that the case?

                        Or is it really just that now is an uncertain time and you feel there's a big risk of capital depreciation?

                        Cheers.

                        Comment


                          #13
                          If the property is a new build with a guaranteed return for an initial period, I'd be very careful about purchasing, personally.
                          The developer treats the guaranteed rent as, essentially, a discount.

                          The building has no track record of rental income and, by being brought into existence, increases supply without reducing demand.

                          At a time when living in city flats has been shown to be less appealing than before...
                          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                          Comment


                            #14
                            When it comes to a possible downturn the market , Flats invariably suffer with valuers taking a cautious approach and that is top of the agenda for New Developments.
                            Speaking with several lenders today it was clear that any form of incentive has to be quantified and taken into consideration when looking at the “ Sold Price” Forgive the cynicism but Builders never ever give away “ Free Money” Builders Builders into the developments a premium for the fact that the property is brand spanking new and when properties are sold the Freebies can distort the true value.
                            Remember that builders often place a requirement that the purchaser must use their appointed broker, recommend using their appointed solicitor in return for a discount on fees , Why well appointed brokers pay over a percentage of the fees paid by the lender in return for being the sole appointed broker.
                            Stay independent but again and at least for the present avoid flats.
                            one last thing to establish if you chose to go ahead is having site of the legal contract which categorically permits the property to be let and whether there are restrictions on pets.

                            Comment


                              #15
                              The Select Committee has warned against using "stooge solicitors".

                              https://www.leaseholdknowledge.com/d...ls-government/

                              Comment

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