New houses being built...potentially interested...a few questions

Soldato
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22 Jul 2006
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Some new houses are being built in a town/village nearby.

As a 1st time buyer I have limited knowledge in mortgages & haggling when buying an already built home, however are things different when buying off plan?

For example, me and the gf go into the building site office this weekend, and before paying a £500 reserve fee or whatever, I have a few questions:

Do you pay the mortgage back only when you get the keys and moved in?
Do we arrange the mortgage now ready for completion (could be 12 - 18 months time when the houses are complete)?
Is there quite a bit of potential to haggle? i.e. a fair chunk off the price, better spec'd kitchen etc etc?

I would love to get feedback from those on here who have experience of buying a brand new home!

Cheers

Graham
 
I've just moved into my first home, which was a brand new home.

There certainly is scope for haggling. I managed to get a few thousand of the price, however as i was going through a scheme (homebuy Direct) I couldn't haggle too much, as the housing company was already lending me 17k to go towards it!

The reservation fee is refundable when you move in.
You start paying the mortgage after completion (completion and moving in are two different things). So essentially when you get the keys you will be paying for your mortgage. You first payment will probably be a little bit more than your monthly payment, it might even be a little bit less, as hey are prorated as to when you move in. E.g. x + a few days outstanding if you completed in the middle of the month. Your solicitor will go through all of this with you though.
 
I would have to ask my parents, since they bought a brand new house in 92. I know you get a year or so to call them back in and fix any shoddy work, I remember a bay window at the front of the house; when it was closed you could see daylight between the frame and the window. :rolleyes: These were old wooden windows, not sure what spec of house you're looking at.

There's a fair cost on top of the house that you will want to allow for in your mortgage potentially. There will be no carpets, no shed, no turf, no lightbulbs, etc etc.
 
Yeah we would be looking into the homebuy scheme, how does this work, there is up to 30% available on a 5 year interest free loan. Do you start paying this back after the 5 years?

Also did you have to pay any deposit or was the homebuy scheme used for that?

What are the chances of haggling for a better kitchen rather than money off the house?
 
There's a fair cost on top of the house that you will want to allow for in your mortgage potentially. There will be no carpets, no shed, no turf, no lightbulbs, etc etc.

Don't they all come decorated, carpetted, sometimes even with white goods?

I know family who have bought new build got to pick the finishes they wanted.
 
The HomeBuy Direct scheme might not be aplicable on these plots, if you get passed for funding, you have to find a place within x amount of months. It's a good scheme though.

After the 5 years which is interest free, you start paying a charge on whatever you have borrowed (up to 30%). You can stair case payments and start to buy bits back, or if the banks are allowing greater mortgage borrowing you can stick the rest on the mortgage.

It's an equity based scheme though, meaning this:

You buy a house which is worth £100,000
You borrow 30% (15% from the housing company, 15% from HomeBuy), so £30,000

In 5 years you want to either settle up, move, or whatever, but your house is now worth £200,000, instead of the £30,000 you owe, you now owe £60,000.

if the house in 5 years was worth £50,000, you'd owe 30% of that price, so £15,000. It goes both ways you see/

You do pay a deposit. You have to pay 5%, the rest of the deposit is paid for as part of your homebuy direct scheme. The 5% is just proof that you can afford the place, so aren't going to move in then move straight out again, essentially it's a waste as there's lots of people who want to get onto this scheme.

You have no chance of haggling for a better kitchen. I was very lucky to get money off. With the scheme you can't get any extras on it (don't forget the housing company are giving you 15%). my IFA had to ensure that the housing company didn't give me anything on top as an incentive. So I had to purchase my own carpets, white goods, etc etc. I moved in to walls, roofs, kitchen units and tiles, bathroom stuff, lightbulbs and that's about it really!!

My deposit was 3500, solicitor fees on top of that, plus white goods, sofas etc, I'm looking at close to 10k spent of my own money. So make sure you have savings, as it's bloody expensive.

Any more questions, just fire away :)
 
you get the reservation fee back?? really?

Yep, my £500 was refunded and went towards solictor fees.

Don't they all come decorated, carpetted, sometimes even with white goods?

I know family who have bought new build got to pick the finishes they wanted.

With the HomeBuy Direct scheme it's different, see the explanation above.

They come decorated in terms of the walls are painted, but not carpets. Mine came with an oven, sink, units, tiles in the kitchen. 2x toilets, 2x sinks, bath, shower, shower curtain, painted floors (no substitution for carpets / tiles though!) a shed and that's essentially it.

If you are buying a new house and can afford the deposit without help, you can bargain for turf, carpets, white goods etc etc etc. With this scheme they can't really help you much!
 
Very interesting, cheers for that :)

It is just an option at the moment, looking to buy a house by the end of this year, however as they have decided to start building again this is an option.

I have put a request in for a call back from the developer however will be phoning them in the next half hour do get some idea on house prices etc.

Is there a number to ring for the homebuy scheme, or should the sales people have all details and any answers on what we would have available?

As my gf is a nurse & myself in a sales role we should have no problem being able to meet the criteria.
 
The sales people will have all the details you need. It's a regional thing and not centralised. So won't be a single number. Google will help you (I'm at work!).

It's a good way to get onto the housing ladder. I certainly wouldn't have been able to afford my own place without this scheme, so I'm very grateful for it. Hopefully the market will pick up so I can remortgage the rest of the monies on top in 23 months time :)

Other than having a really big deposit (25% or so), you'll struggle to get onto the housing market without this scheme. Just remember if you do buy your own place you will need to have savings for the 5% deposit, solicitor fees plus everything which you need in a house (beds, wardrobes, carpets, curtains, cutlery, lampshades, sofas etc etc etc). It adds up!! :)

Any more questions, just fire away or drop me an email. I'll pick this thread back up in an hour or two after lunch! :)
 
Cheers mate. Appreciate that, like I say got a call in with the sales office so waiting on their response.

We have the 5% no problem, and it will be 12-18 months till completion anyway so will have plenty of cash in the bank for all the carpets etc etc. We have all the cutlery anyway so potentially all ready to roll!

Have you an idea on what the repayments of the £17k will be after the 5 years??
 
A LOT of people have been caught out because they exchanged contracts (not sure what this is called in England, but in Scotland it would be concluding missives) on a house that wasn't built, for an agreed price. There is nothing in the contact to say WHEN the house must be built, so it is heavily weighted in favour of the builder.

If prices then drop, you have already agreed to pay £XXX, when the house is in fact now valued at £XXX minus 15%, so you won't get a mortgage for the full amount, yet you are legally tied-in to paying for the house.

Be VERY VERY careful about houses which aren't yet built.
 
We've just bought through HBD, and what is included is down to the developer, not the scheme.

Our purchase price included:

Washer/dryer
Boiler
Oven
Crappy electric hob (which we upgraded at our own cost)
Toilet/bath/shower/sinks
Kitchen work surface and cabinets.

We have decided to get a fridge elsewhere, as they wanted silly money for a crappy one, and had to pay for all the flooring/underlay ourselves.

Thankfully, the wall tiling for the bathroom had one of the options out of stock, and they made one that was usually an upgrade free, and it was the one we wanted :D

Annoyingly, people reserving flats 2 weeks after we had already reserved ours got £3000 worth of vouchers towards flooring and upgrades!!! :mad:

But we wouldn't have gotten a parking space included had we waited, and that is worth a fair bit of money in London, and overall convenience.
 
Well going to apply through homebuy direct. Got a slight problem that their is only 3 bed minimum and only 2 of us. However we will be looking to start a family ;)

Going to pay £250 to secure the plot, and hopefully watch this space.

Just out f curiosity, who have you guys got for the mortgage? Do most lenders accept the home buyer scheme when applying for the mortgage? i.e. 95% borrowing of the 70% value of the home?

Also how long did it take fr you to get an aswer back from homebuy??
 
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