Moving to New Build

PiKe · 19 May 2017 at 16:17

I purchased my house for £150k, I have 22 years a 5 months left on my (26 year) mortgage, I originally borrowed £78k but now have £68k left to pay.

There are new builds popping up around me and I want to work out the feasibility of moving into one next year, I estimate they will be around £250k for a 2 bed house.

My current property is probably worth a little more than I paid, say £163k, the new house builders say will purchase my property based on 2 independent valuations.

Assuming that my mortgage cannot be moved, I would have to pay off the remainder plus 1% early repayment fee next year, that would leave me with approximately 90k as the deposit on the new house, plus £50k that I can get on HTB, this obviously leaves a shortfall of 110k, which based on my wage, I assume bank will not offer to me, however I would be able to afford the repayments as my outgoings are very low.

My partner is currently studying but will start work next year.

What are my options?

Psycho Sonny · 19 May 2017 at 16:31

how do you plan on getting HTB if you already own a home?

Scottland · 19 May 2017 at 16:43

Have you put your income/outgoings into an affordability calc on a lenders site? They tend to work on affordability now, rather than a 3X salary etc.

With regards to first time buyer offers or schemes, including HTB - I believe they are available as long as one person is a first time buyer. So assuming your partner isn't on the current mortgage but is on the new one, then you should have a broader range of options.

PiKe · 19 May 2017 at 16:44

It's available to existing homeowners if you're moving home.

Psycho Sonny · 19 May 2017 at 17:11

how does that work as HTB is to help you with your deposit and he already has £90k equity, therefore deposit for the next place.

you need to go to a lender and get an AIP (agreement in principle). that will tell you how much they were willing to offer you based on all the info you provide them which is all your households income and outgoings.

you have to take into account by buying a bigger more expensive home can mean increased bills across the board. electricity, gas, council tax, water, insurance, etc. so you need to put all of that info in. then you need to take into account the stamp duty and solicitors fees too and account for all of them.

once you have all that info you need to deduct it from your monthly income and all the fees from your deposit. stamp duty will be £3k ish for example

PiKe · 19 May 2017 at 17:47

Everything I have read implies that HTB is available on a new build home even for those looking to move into a bigger home.

Sui · 19 May 2017 at 18:02

I think it only applies, if your prior house is already sold.

PiKe · 19 May 2017 at 18:48

It will be, to the developer of the new home.

PiKe · 19 May 2017 at 18:59

Found the answer, and it's not the one I wanted.

Can I part exchange my existing home for a Help to Buy home?
Part exchange is not available. House builders selling Help to Buy homes cannot offer a part exchange sale.

Skillmister · 19 May 2017 at 21:41

PiKe said:
Everything I have read implies that HTB is available on a new build home even for those looking to move into a bigger home.

I have clients who have just sold and are moving into a new build with HTB. Both were sellers and both will be buyers

Psycho Sonny · 20 May 2017 at 12:36

argh it's a £200K threshold and has to be a brand new house in scotland. was £230K threshold until march this year. march next year it's a £175K threshold.

useless scheme for me. plus mortgage company puts you on a worse rate if you use HTB as well so worth considering.

HangTime · 25 May 2017 at 11:23

Why do you want to move into the new build anyway?
My recommendation would be to figure out where your partner is working next year first as this may influence where you want to buy your next property anyway.

PiKe · 28 May 2017 at 20:04

HangTime said:
Why do you want to move into the new build anyway?
My recommendation would be to figure out where your partner is working next year first as this may influence where you want to buy your next property anyway.

Because I want a brand new house? I want a house that hasn't had idiots ruin like the one I'm currently in, it was rented from new and it hasn't been cared for. Also I want somewhere that I can just live in and not worry about doing maintenance on all the time.

The money I would need to spend to get it up to spec, I might as well put that into moving elsewhere, the location isn't ideal anyway.

I know for a fact we will need to live near the local railway station because my partner doesn't drive and the job she will be doing will not be available in this area.

HangTime · 28 May 2017 at 23:32

That's the sort of scenario I was thinking about - if you know there won't be a suitable job nearby, potentially that might mean next year you might want to consider living in a different location to make it easier for her work. It depends a bit on how well connected the local train station is of course, but given you've said the location isn't ideal, would make me think along those lines.

Obviously, I don't know your personal situation so there could be strong ties to your current area rather than using work as a driver for that, and I'm just throwing out considerations based on my experience. Living next to a train station helps but depending on the routes served etc that can still mean reasonably long commutes for jobs not that far away, if it requires change of train etc or the job is a long way from the train station at the other end.

Based on the information provided whereby you are currently tied in to a mortgage with ERC, and you are expecting a big change in circumstances for your partner next year, I would hold fire and assess nearer the time when you should be clearer on stuff like what your partner's earnings are and where her place of work is. From what you've said, you don't think you could find a lender to offer you the £110k required, so presumably your partner's future income would help with that.

Finally if you bought in late 2013 then I'd expect you to find by 2018 the property is worth more than the £163k you are banking on, so you might find the amount needed to borrow is a bit less than expected.

Psycho Sonny · 30 May 2017 at 13:08

PiKe said:
Because I want a brand new house? I want a house that hasn't had idiots ruin like the one I'm currently in, it was rented from new and it hasn't been cared for. Also I want somewhere that I can just live in and not worry about doing maintenance on all the time.

The money I would need to spend to get it up to spec, I might as well put that into moving elsewhere, the location isn't ideal anyway.

I know for a fact we will need to live near the local railway station because my partner doesn't drive and the job she will be doing will not be available in this area.

brand new builds are just made as cheap as possible that meet the spec requirements for the regulations as well as the builder.

as for maintenance. you will always have that. boilers and their parts are only warrantied for 1-10 years. roofs are built to last 25-40 years. things will break or stop working all the time. nothing is built to last forever without maintenance. sockets will stop working. flooring will need replaced. doors will need replaced. windows will need replaced. everything has a shelf life.

new builds have as many cons as they do pro's. i know people who have done the opposite move. from new build to a home with more character like wooden beams in the ceiling, etc. new builds however have more mod cons. lots of bathrooms, etc. however nowadays their gardens are tiny. driveways also non existent. 5 bedroom houses with only enough space for 2 cars with no visitor parking. forget having a front garden too. some have tiny bedrooms.

your better off with a house built in the past 20-30 years. when space was less of a premium.