New Build - First Time Buyers

Jano · 15 May 2013 at 15:10

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 · 15 May 2013 at 15:52

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 · 16 May 2013 at 09:46

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 · 16 May 2013 at 09:56

In my opinion, everything in this god forsaken country is too close to London

Jano · 16 May 2013 at 13:04

Yep, Three Mile Cross.

Jano · 16 May 2013 at 15:13

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.

Jano · 17 May 2013 at 14:16

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.

Jano · 17 May 2013 at 16:00

Datamonkey said:
With the new buy scheme IE the 20% offered by the government After five years the government interest-free loan attracts a fee of 1.75%.
This increases every year by RPI inflation plus 1%.

You cannot pay off the government loan until the mortgage is repaid in full or the home is sold.

So if the house increases in value the government still take 20% of what the house sells for.

That in itself is a scary prospect to me, my wife and I were seriously looking at the scheme ourselves. Thinking we would save a massive chunk.

That's not what we've been told at all. We've been told we pay off the interest on the loan at £69 a month after the 5 years are up, and this may increase each year by RPI inflation plus 1%.

We were also told we can pay off the government loan at any point, however if we decide not to they will take 20% of the sale of the house.

Jano · 17 May 2013 at 16:25

Right, done some digging and it seems you are right, however you can pay off 10% of the loan at any point. It makes very little difference for us though as the fee would pay for the equity loan is so much lower than what we would pay for the higher mortgage it would be ridiculous for us to not make use of it.

Jano · 13 Aug 2013 at 11:19

Surprised this thread is still rumbling along!

We are almost there. Hopefully completing at the end of the month, ended up getting £5k off, gardens turfed, all carpets and flooring in kitchen and bathrooms, and integrated appliances in the kitchens. Build quality is generally ok, had a builder friend round snagging and other than a few bits of tiling and some of the doors not closing properly all is ok. Semi-detached two bed, roads are fine, parking for 3 small to medium cars, tiny front garden (more just a patch either side of the path to front door), but a decent sized back garden, which has caused our only issue with the developers, as they want to charge an admin fee of £120 to give us permission for a shed.

Our main issue however has been with the help to buy agents. We got the authority to proceed from them early June, which has a 3 month time period. We've been trying to exchange now for almost a week and a half, and the only outstanding point has been the final authority from help to buy, who have been stalling, unresponsive and generally being a pain. Don't know if this is standard procedure but it has caused us some grief as we just want it all done now.

Jano · 13 Aug 2013 at 11:43

Ours is almost exactly the same, a smallish development by a "smaller" builder on a much larger development handled by Bovis. Other than attempting to fob off our complaints about the tiling (the monkey put the border on upside down in a couple of places, sales woman tried to suggest it was random), they have been very accommodating.