Can a developer make us exchange contracts?

The developer of our new-build house is putting pressure on us to exchange contracts, but the house has been delayed and our mortgage agreement expires soon. What happens if we exchange and our mortgage offer is not renewed?

Question: We are trying to buy a new-build house that was due to be finished at the end of October. We have a mortgage offer but it expires at the start of December. We’ve just heard the house won’t now be completed until the end of November. The developer is putting pressure on us to exchange — but what happens if our mortgage offer is not renewed?

Answer: Unless you can raise the finance elsewhere, for example from savings or by selling investments, do not exchange contracts without a mortgage offer in place. On exchange there is a binding legal agreement with the developer and you would have to complete the purchase or face penalties for breach of contract.

A developer may give a fixed completion date if the house is about to be finished but more often than not, completion is on notice — ie once the place is finished, the developer gives the buyer notice to complete the purchase, usually 10 days, enabling them to carry out final inspections, get together the funds to complete, and sign completion paperwork. 

Has any reason been given for the build delay? Will the developer give a fixed completion date of the end of November, or will they insist on completion on notice? Ask your lender to extend the mortgage offer, perhaps to the end of December to allow some leeway and ensure the new mortgage offer, with the new expiry date, is actually issued. Your and the developer’s lawyers can then liaise over completion dates. 

Ideally you should have a fixed date that precedes expiry of your new mortgage offer. If the developer won’t agree to that, your lawyers could try to negotiate terms in the contract which will allow you to withdraw without penalty if completion is delayed again and cannot take place before your mortgage offer expires.

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If you have a question for Fiona McNulty, please email or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE. We regret that questions cannot be answered individually but we will try to feature them here. Fiona McNulty is a partner in the residential property, farms and estates team at Withy King LLP (

These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor. 

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