new houses - opinions canvassed

drooke · 17 May 2005 at 8:23AM

Hi All,
I live in Reading and am weighing my options regarding moving home, or whether I should bother at all. My current view is that the market will correct gently and so that shouldn't necessarily put me off from buying...but I'm still mulling things over.

Anyway, is there any value to be found in buying brand new homes right now? I've seen developers offering stamp duty paid, 5% deposit paid, new carpets and furniture move costs covered. Is it possible to get more?

Thanx,
D

Nicks_3 · 18 May 2005 at 3:23PM

Don't be fooled, most builders use the cheapest products when it comes to carpets, curtains ect..

The most important aspect when buying a house is location and always ask yourself the following questions

1. When it comes time to sell, who will be my target market?
2. Crime rate for the last years, did it go up or down.
3. Ring the police and ask if they know of any serious incidents that have taken place within your area.
4.Visit the proposed premises on both weekdays, evening, and especially weekends, the best way to see if you will inherit noisy, awkward neighbours.Nothing worse than neighbours who have dogs barking the whole day for nothing
5.Do home work on schools, local council
6.When ever you buy a new house, their will always be problems and maintenance.Plasterboards will crack as the house dries, and a whole bunch of other little things, like electrics, toilets, ect. You will only find what these things are once you have moved in. Typically, the builders will take some time to get these fixed, as they already have their money. Like a say, nothing serious, but it is hassle, time and chasing these folks can be very frustrating.

Check with DTI and see if there has been complaints lodge against the firm, etc..., all logical stuff.

Stamp duty is a voluntry tax, you do not have to pay it is your set-up the right vehicle, talk with international tax consultants, not your average account who does not know European law.You will have to pay it when you sell your house, but you just pass it onto the seller.Some lenders do insist you pay the SD, but there are a handful that do not insist.

http://www.hmrc.gov.uk/bulletins/tb71.pdf

http://www.businesslink.gov.uk/bdotg/action/detail;jsessionid=CLMqBG4Js1NScTGgzyVLBBL4ylmXtnSlwc25nFQpfdgBLcjTQGnq!135140498!1116425386491?r.l3=1073863431&r.l2=1073859221&r.t=RESOURCES&r.i=1073793954&r.l1=1073858808&r.s=sc&type=RESOURCES&itemId=1073789397

Norma_Desmond · 18 May 2005 at 3:33PM

I would never buy a new house unless it was the ONLY option. My father in law decorates new-builds and once put his elbow right through an internal wall just by leaning on it!

theGrinch · 18 May 2005 at 3:36PM

i tend to believe you always paid more for a new home psf (10% more?) and some materials are better and some worse than old homes. the increased cost of the land is being pushed down to the final buyer

location is crucial and space. regarding negotiations yes you can always ask for a better deal. new home or old is personal choice

dougk_2 · 18 May 2005 at 4:36PM

I don't live far from Reading!
Personally I wouldn't buy a new house unless it was something special and nt part of a "development". Modern houses are not to my taste and I don't want to live in a shoebox with a small (if any) garden and have all the other houses in the area looking exactly the same.

As other posters have said the materials and furnishing used are bulk trade cheap stuff so carpets etc won't last that long and again everyones house will be similar.

House prices in the area of Reading where I am have been a bit up and down for the last 3 years so no great increases and no great losses! I think personally things wont change much in the next year or two either.

bylromarha · 18 May 2005 at 5:29PM

I'd say depends where you're at and how the deal is for you financially.

We bought a new house 3.5 years ago and yes it's drying out so cracking is visable and yes the carpets aren't top of the range and yes the builders were a pain sorting it out and yes, OH didn't like the thought of a shoebox house with paper walls.

The builders paid our deposit, put in carpets, gave us £500 moving costs and as a first time buyer it was the only way we could get onto the housing market. We didn't have a deposit and were struggling to save one, so a new build was a great option for us. 100% mortgages offered terrible rates.

So glad we did buy our house as it has now doubled in value (not solely due to the rise in the market) and each house on the estate that goes on the market is sold within 6 weeks, even though the area as a whole has slowed down.

So OP, consider what is being offered to you and if the deal suits you on a new build better than an older house, then go for it.

Debt_Free_Chick · 18 May 2005 at 5:39PM

Purely from a financial point of view, you generally take a hit when you sell a new home. The reason being that the price you pay is for the bricks & mortar and the fixtures, fittings, carpets & curtains. Only the bricks & mortar are likely to increase in value. The others will definitely decrease, as they have a very low second hand value, but you paid "top-whack" when you bought the property.

Of course, you may find that the bricks & mortar increase covers the loss on the fittings - but you would still get less of an increase.

I moved from a period Edwardian Property I restored, to a new build. I have to admit, I was really rather impressed with the quality of finish & fittings. And it certainly felt "luxurious" and beautifully new. There is a variety in the finish, though, between different builders and you should look carefully at the show home and then ask to see samples of what you get to choose from. In my (limited) experience, if the developer is very flexible, then that's a good sign. In my case, I swapped the lawn in the back garden for a slate tiled dining room (as it was open plan and part of the kitchen). They then lawned the garden anyway - LOL!

I think that whilst these special offers look good, you rarely recoup the value on subsequent sale. And be careful .... if you are getting your stamp duty paid, there is no way for the next buyer to benefit from this "offer". And that might put your property in the less appealing bracket.

A few thoughts ...

HTH

mountainofdebt · 18 May 2005 at 8:58PM

My hubby is involved in the construction of new builds and he would NEVER buy one.

terrierlady · 21 May 2005 at 8:38PM

Lots of Developers are coming to half year ends or year ends and hence have lots of good offers in the way of incentives to offer so vist a few developments and check what incentives are there for the asking.

bunking_off · 22 May 2005 at 5:09PM

Nicks wrote:

Stamp duty is a voluntry tax, you do not have to pay it is your set-up the right vehicle, talk with international tax consultants, not your average account who does not know European law.You will have to pay it when you sell your house, but you just pass it onto the seller.Some lenders do insist you pay the SD, but there are a handful that do not insist.

http://www.hmrc.gov.uk/bulletins/tb71.pdf

http://www.businesslink.gov.uk/bdotg/action/detail;jsessionid=CLMqBG4Js1NScTGgzyVLBBL4ylmXtnSlwc25nFQpfdgBLcjTQGnq!135140498!1116425386491?r.l3=1073863431&r.l2=1073859221&r.t=RESOURCES&r.i=1073793954&r.l1=1073858808&r.s=sc&type=RESOURCES&itemId=1073789397

Go on...I'll bite. In which way is stamp duty a voluntary tax? (other than the obvious that no-one forces you to buy a house at a given price).

From the Inland Revenue site, I gather that in the past stamp duty was only paid when documents were "stamped", and there was no legal requirement to do that - hence the "voluntary" I guess. However, in absence of the stamp the document wasn't valid as a legal document to signify registration of title, so I doubt any solicitor would ever accept it when you subsequently came to sell the property?

Now, that stamp duty's been replaced by Stamp Duty Land Tax (a change I wasn't aware of, and I doubt anyone else other than conveyancing solicitors & tax experts had noticed!), it doesn't seem that the voluntary aspect applies at all.

Have I missed something?

bunking_off · 22 May 2005 at 5:19PM

drooke wrote:

Anyway, is there any value to be found in buying brand new homes right now? I've seen developers offering stamp duty paid, 5% deposit paid, new carpets and furniture move costs covered. Is it possible to get more?

D

I'd make any decision on whether you like the location and house design. Don't choose new versus old on the basis of potential financial return - at the end of the day the value of the new house (with incentives) will be whatever the market will pay and the builders will know that far better than you or I, so the chances of getting a bargain are limited.

I would caution against buying a new home for delivery just before the financial year end for the builder....they'll cut every corner to get to completion so they can get the revenues into their P&L for the year. You may get a bargain in terms of being able to negotiate a better deal, but you'll be dealing with snags for years to come.

New homes are not all crappy build, but there are examples of it. If you know anyone in the trade, it's worth having a chat with them as a given contractor will work for many builders, but the quality of materials will vary markedly.

Some people like new, some like old properties. What always strikes me is the downright snobbishness of people who prefer the latter. I don't want to be painting my window frames every couple of years so I'm happy with uPVC - if you listen to the typical property afficienado on Channel 4 you'd think I was some kind of chav for that. Also, with a new build, it's very nice to have a shower running at mains pressure - I can do that with a period property, but only if I rip half of the plumbing out. But that doesn't mean I think any less of someone who does prefer "period charm".

Saying this, I'd be wary of buying brand new again...2 years old is ideal, as you get a nice NHBC warranty and the knowledge that some other poor s*d has had to deal with the snagging issues with the builders.

new houses - opinions canvassed

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