New Build - First Time Buyers

Jano

Jano

Jano

Associate
Joined
31 Mar 2009
Posts
2,383
Location
Basingstoke, UK
Not sure if I've made a mistake, but to appease the other half I reserved a new build plot on Monday morning. At the moment it's only £500 that's being held against the reservation and we have an appointment on Saturday for further discussions. We also have had the agreement in principal done and been offered a mortgage of up to £240k, with the help2buy scheme offering 20% of the purchase. We also have a deposit saved of £15k.

We've been given some advice from friends/relatives but as we are totally new to this, not really sure if we've screwed up by being too eager -

We had been told that the builder would normally pay the deposit, however as we are using the government scheme they are unable to do this?

Also had been told the builder may pay stamp duty?

Bargaining on house options and price - house has a list price of £239,995, and due to the state of completion apparently certain things can't be changed - electrical points, kitchen finish were the two we were told.

I feel like we are now in a somewhat weak position due to reserving the property, will the builders expect some negotiation on the these points even through we are obviously very keen and have everything in place to move ahead?
 
Jano said:
I feel like we are now in a somewhat weak position due to reserving the property, will the builders expect some negotiation on the these points even through we are obviously very keen and have everything in place to move ahead?
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I agree, you have weakened your position but all is not lost. You need to be very clear about what's included and what's not, the standard spec vs the show home spec can differ wildly.

They may pay your stamp duty but you'll need to declare this to your lender and it could be taken off the equity you require, it depends on their terms whether they see this as a vendor gifted deposit or not. Bear in mind that while you'll save on stamp duty, you'll lose elsewhere on either the included extras or purchase price.

As I said, you'll have weakened your position but they'll want to know the plots are sold. Note that you are best negotiating either early off plan or at the end of their fiscal year. I was offered a cracking deal on a new build but had to pass as I couldn't sell my house at the time.
 
I didn't mention that we haven't actually signed anything yet and would only lose £250 of the £500 if we pulled out. Unfortunately the GF was panicked by the lady who took us around who pulled the houses are selling fast and we only have a few left ploy :(
 
Jano said:
I didn't mention that we haven't actually signed anything yet and would only lose £250 of the £500 if we pulled out. Unfortunately the GF was panicked by the lady who took us around who pulled the houses are selling fast and we only have a few left ploy :(
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Always tough when the other half falls in love with something and rational thought goes out the window.

Just remember £250 isn't a lot to lose in house terms given it's a mid to long term commitment.
 
Jano said:
I didn't mention that we haven't actually signed anything yet and would only lose £250 of the £500 if we pulled out. Unfortunately the GF was panicked by the lady who took us around who pulled the houses are selling fast and we only have a few left ploy :(
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That is a very common selling technique, you've probably been told a pack of lies.
 
Builder may pay stamp duty, if they don't have a look at Halifax mortgages and see how the rates compare: http://www.halifax.co.uk/mortgages/offers/

The builders will expect negotiation, but they will give you all the spiel about how people are literally queuing up round the block to hand over their cash, they can't make appointments because then they'd have to turn people away, they can't give you a brochure because if they gave everyone who asked one they'd run out in an hour, they can't sell you house X at the price of the next one down in the range (i.e. you want a £240k house, probably they sell a ~£200k style of house, they will initially laugh in your face if you start talking about doing at deal around £200k) etc. Just ignore all that nonsense and stick to your guns.
 
You should be in a good position to try to bargain, money off the price if you can, money towards options to go into the house, stamp duty paid etc. Don't ask, don't get!
 
Make sure you get them to include carpets/flooring in the deal if it's not got anything specced already.

They will do it and just makes it easier having it done when you move in rather than getting it done after.

As for the 'they are selling quick' from experience it's not all total balls they speak, we've found round here getting in on any of the nicer new developments you had to be quick as only the worse plots we wouldn't wanted were left.
 
Don't underestimate how fast good decent specced reasonably priced new builds are being snapped up, I was on a humongous development the other day and they can't build them fast enough every phase is sold in a morning of release.
 
maccapacca said:
Don't underestimate how fast good decent specced reasonably priced new builds are being snapped up, I was on a humongous development the other day and they can't build them fast enough every phase is sold in a morning of release.
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Seen the same, was on one site a while back, they had two show houses for viewing, & about 60% of the houses were already sold & they were only at footings stage.
 
They *may* have been telling the truth, they also told us that this was the first weekend they had been able to take people into show homes and 75% of the two beds had already been sold. There were 5-6 left, probably the same number of groups looking around them and several cars lurking around the estate. It is in a very good location - literally 2 minutes off the M4 outside of Reading, and there is huge demand in the area.
 
Jano said:
Yep, Three Mile Cross.
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I will give you some honest advice based upon experiences of numerous friends who moved to Kennet Island just over the motorway. The first thing you need to know is that they are all trying to move out. The place is slowly turning into a ghetto and two of them have had their properties on the market for nearly 18 months with no interest. My ex-manager has two rental properties there and the values have bombed recently and he is also stuck with them, but he owns them outright so will continue to rent them out. The transport links into town are also less than desirable, making it very expensive for an evening out somewhere which is less than three miles away.

There is pretty much nothing in Three Mile cross either. The idea of a new build is something I also considered before I moved earlier this year but was looking at a few new places closer into town, but decided to get something more esablished in the end. I work in the mortgage market and I also hear endless stories of valuers going out and stating that the purchase price is above the true valuation. This is unfortunately because of the problems I have mentioned above regarding Kennet Island.

Sorry to be so negative but you need to consider the above. If you have no inclination to go into town much or use the rail network then it would not be so much of a problem but have a look at the layout of the estate and imagine it in ten years time. I would also find out how many, if any, are being sold as housing association as that is where trouble may come from.
 
The GF is a Teacher in Whitley and I work in Slough, so it's kind of handy for us and we tend to avoid Reading itself - I've hated the place for years. There are two parts to the development, the bellway homes bit we are interested in has no housing association places, and the bovis bit which does, unfortunately the place we are looking at isn't too far from the bovis bit, and it is a concern.

I live in Twyford with the parents at the moment and the GF in Tilehurst with hers, so no matter what we would be looking around this area, as its splat bang in the middle of us. It's also pretty handy to get to the football stadium from. I do have a fair few doubts however so will have to see how things go on Saturday.
 
It does kind of suit both of your commutes. Town has improved a lot as well recently. I avoided it for a long time but regularly go out there now as there are some very good restaurants and bars.

Nice walk up to the stadium as well. When I lived in London I used to park my car in Three Mile Cross and walk up to the Mad Stad. Free parking and an easy escape up the M4. :D
 
15k saved?

Dont go down the shared equity scheme.

Speak with a mortgage adviser and look at going down the 95% LTV if you have to. The mortgage repayments will be more but avoid the new government scheme.

I have been advised that by three separate advisers in the last couple of months.

My wife and I have just completed a purchase on a new build.


Going down either the 20% government scheme or the 95% LTV method wont leave a lot of room for bargaining. The home builder has to stump up some cash to the government. From what i hear you may be able to get around 4% discount or worth of extras.

Our house price was 250k we got them down to 245k plus all fitted appliances/tiling/carpets/turf and various other extras.
We had the choice as at that point in time the house was just literally 4 walls with the roof going on.

I also got them to wire in Ethernet to all rooms terminating in what will be my study and also as it was wooden flooring down stairs asked for the rear surround speakers to have wiring and terminals in the walls. This i was expecting to pay for but they did for free. I had to supply all materials though.

This is with David Wilson homes.

If you want some impartial mortgage advice drop me a email in trust and i can pass you on the details of our adviser.
 
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From what I can tell, if we dont use the help to buy scheme our mortgage repayments increase by around £300 a month, we could do it, but it would be extremely tight. Is it just due to a weaker bargaining position that you were advised to avoid the government scheme? Everyone we've spoken to has said the exact opposite.
 
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