A Beginner’s Guide to New Home Terminology

An AIP – also called a Decision in Principle or a Mortgage in Principle – is a lender’s initial indication of how much you could borrow, based on a quick assessment of your finances. Getting one can help show that you’re a serious buyer and likely to be approved for a mortgage, but it isn’t a guaranteed mortgage offer.

A build stage is the current point in construction, from groundworks through to completion, and helps you estimate when your new home will be ready.

An EPC rates a home’s energy efficiency from A to G. New builds typically achieve higher ratings of A or B thanks to modern insulation and heating systems.

A new build is a home that’s in the process of being, or has just been, constructed and has never been lived in before. Everything is brand new, from the wiring to the windows, and it comes with the latest energy-efficiency standards built in.

Buying off plan means reserving a home before it’s finished, sometimes before building has even started. You choose your plot based on floor plans, specifications and show homes, rather than walking through the finished property.

Your plot is the specific home and its position within the wider development. Plot numbers help everyone, from sales advisors to solicitors, identify exactly which home you’re buying.

A show home is a fully furnished example of a house type on the development, designed to help you picture how the finished homes will look and feel.

A site plan is a map of the development showing the layout of every plot, road and shared space, so you can see exactly where your new home would sit.

The specification lists every fixture, fitting and finish included as standard in your new home, from kitchen units to flooring. Always check the specification carefully, as it varies by development and house type.

Disbursements are the third-party costs your solicitor pays on your behalf during the legal process, such as search fees and land registry fees.

Ground rent is an annual charge leaseholders pay the freeholder for the land their home stands on. Since June 2022, ground rent on most new build homes in England has been legally capped at a zero-cost “peppercorn” rate.

A mortgage arrangement fee is a charge some lenders apply to set up your mortgage. You can often pay it upfront or add it to your loan.

A service charge is a fee that covers the maintenance of shared areas and facilities in a development, such as landscaping, lighting and communal repairs.

SDLT is a tax paid on property purchases above a certain value. The amount you pay depends on the purchase price and whether you’re a first-time buyer.

A valuation fee covers the cost of your lender’s survey to confirm the property is worth what you’re paying for it, before your mortgage is approved.

A council tax band determines how much council tax you’ll pay each year. It’s assigned to your home after completion, based on its value.

Handover is when your new home is formally handed over to you, usually following a walkthrough with a member of the housebuilder’s team. This is your chance to ask questions and familiarise yourself with how everything works before you move in.

The defects liability period is the timeframe, often the first two years, during which the housebuilder is responsible for fixing most defects identified in your new home.

Meter readings are taken at handover to record your gas, electricity and water usage from day one, so you can set up your utility accounts accurately.

An NHBC warranty gives you 10 years of structural protection on your new home. It covers the first two years for a wide range of defects, then the following eight years for major structural issues.

Snagging is the process of identifying any minor defects or unfinished details in your new home, such as a mark on paintwork or a sticking door. Report these to your housebuilder, who will usually fix them within the first few weeks after you move in.