Advice on buying new build flat in London

Idonex

Hi,

I'm a first time buyer and have been looking for sometime now. I've found a 1 bed flat i like which i'm going to go and view, but it's a new build property unlike all the others i've seen. I had a few questions regarding offers (assuming i like it!).

1. It's on for 290k with a 35k discount if you complete within 30 days. I have a few concerns over this, mainly being i dont think it's worth 290k and i'm not sure a survey will either. I can afford 290k but dont want to spend over 260k. If the developer is willing to knock 35k off so easily, then the flat can't be worth anywhere near their initial asking price, and what happens if completion takes longer than 30 days. The flats aren't even due for completion until end of September. Is it normal to make a lower offer initially on new builds? I was thinking for trying 10% off their price plus their discount, or to be honest just going in at 249,999 as is. I have no chain, a mortgage in principle and a solicitor organised already. The development is a mix of 1/2 beds and they've made the offers on all the flats. The estate agents 'says' all are gone bar two.

2. Risk of buying a new build right now. It's in an area of London where house prices aren't really dropping, but i'm aware of the value lost as soon as you open the front door as the first owner, but is buying a new build flat right now any riskier than buying an established property in London?

3. How does a valuation and survey work on a new build? If the flat isn't finished how can it be surveyed or valued properly?

Thanks!

facingthefuture

Idonex wrote: »

Hi,

I'm a first time buyer and have been looking for sometime now. I've found a 1 bed flat i like which i'm going to go and view, but it's a new build property unlike all the others i've seen. I had a few questions regarding offers (assuming i like it!).

1. It's on for 290k with a 35k discount if you complete within 30 days. I have a few concerns over this, mainly being i dont think it's worth 290k and i'm not sure a survey will either. I can afford 290k but dont want to spend over 260k. If the developer is willing to knock 35k off so easily, then the flat can't be worth anywhere near their initial asking price, and what happens if completion takes longer than 30 days. The flats aren't even due for completion until end of September. Is it normal to make a lower offer initially on new builds? I was thinking for trying 10% off their price plus their discount, or to be honest just going in at 249,999 as is. I have no chain, a mortgage in principle and a solicitor organised already. The development is a mix of 1/2 beds and they've made the offers on all the flats. The estate agents 'says' all are gone bar two.

2. Risk of buying a new build right now. It's in an area of London where house prices aren't really dropping, but i'm aware of the value lost as soon as you open the front door as the first owner, but is buying a new build flat right now any riskier than buying an established property in London?

3. How does a valuation and survey work on a new build? If the flat isn't finished how can it be surveyed or valued properly?

Thanks!

Hi there, be careful the market has more to fall. Look up house price crash forum, some great advice and it sounds ideal for you.

pinkshoes

If it's due for completion in September, then they've probably been trying to sell them for a while.

I'd go in and offer £250k so just under the 3% stamp duty. The worst they can say is no, and if that's comparable to similar sized properties in the area, then I wouldn't worry about it being a new build.

Is any of the block going to be social housing?

Personally I'd rather have a new build if the other option was a converted flat, as the noise insulation in newbuilds is usually pretty good in comparison to a conversion!!

Idonex

pinkshoes wrote: »

If it's due for completion in September, then they've probably been trying to sell them for a while.

I'd go in and offer £250k so just under the 3% stamp duty. The worst they can say is no, and if that's comparable to similar sized properties in the area, then I wouldn't worry about it being a new build.

Is any of the block going to be social housing?

Personally I'd rather have a new build if the other option was a converted flat, as the noise insulation in newbuilds is usually pretty good in comparison to a conversion!!

Nope it's only 10 flats, none are social. I had a look round and really liked it. Can't think of anything bad really. EA said the developer would take 250k, so i might offer 240k. Which to be fair is a very good price if compared to other flats in the area.

lynzpower

where abouts are they?

Who is the developer?

geoffky

ASK any estate agent and he will tell you 1beds are very hard to sell....

PasturesNew

They might not be social now, but what if you're the only buyer and they sell the rest to a HA in a year?

What if you're the only owner occupier and the others are bought by BTL landlords who put DSS claimants in, with their dogs/kids. And the woman one side of you hates the woman the other side since she caught her sh*gging her husband some time ago ...

New build. Walk. Wait.

SouthCoast

as the noise insulation in newbuilds is usually pretty good in comparison to a conversion!!

It is rubbish in my Bellway recent build!

ohyespleasethankyou

Take the discount with a pinch of salt. 35k off if you complete within 30 days might have been attractive two years ago but is taking the michael now IMHO.
35k off if you complete in 30 days or 40/50/60k off as months go by, prices drop and they cant sell! Also be dubious about 'they have all sold' - why would this dev be any different to all the others that are struggling for buyers?
As has been said, 1 beds are harder to sell and in the current market, you should now be able to squeeze up to a 2 bed for guests/lodger/junk etc. My wife's friend is in a similar position. She has been trying to find a place she can afford for 18 months and has been gazumped twice. Now the worm has turned she says it is like being a kid in a sweet shop and after struggling to find a place for so long, it is tempting to grab the first thing that comes along. You really are in a great position so I'd be patient and go in hard if you really want this place.
Why you would want to live in a new-build 1-bed flat is bizarre.......but nothing to do with me ;-)

Idonex

It's in Bethnal Green (Tower Hamlets) which looks like it's dropped either 2.3 or 5.9% in the last quarter, depending on what sites you look at. Can't recall the developer off the top of my head, i left the info at work.

Apparantly they're all sold bar two. EA said the flat i looked at was under offer by the woman pulled out because no one would give her a BTL mortgage.

I did really like this place but i'm in no great rush and am perfectly happy to leave my nice deposit and ISAs slowly gain weight. I guess more will come along, was just curious if new builds are likely to suffer more than older places.

Well i'd rather live in a 2 or 3 bed but 1 is all i can afford! I don't really want to live on a council estate having done so before, and that's the only way i could afford anything bigger. I could move further out but i spend vast amounts of time travelling all over inner London, and spent 4 years commuting from the suburbs, then travelling all day once in work, and it almost drove me over the edge.

ohyespleasethankyou

Idonex wrote: »

Apparantly they're all sold bar two. EA said the flat i looked at was under offer by the woman pulled out because no one would give her a BTL mortgage.

It does seem the sort of dev that would attract BTL buyers then? If so, they will soon be handing the keys back and you could grab one at auction???

Idonex wrote: »

did really like this place but i'm in no great rush and am perfectly happy to leave my nice deposit and ISAs slowly gain weight. I guess more will come along, was just curious if new builds are likely to suffer more than older places.

If you are in no rush, you are going to be able to afford a 2-bed place pretty soon :T
I would suggest that new-builds will suffer more as they are more as there are generally several of them for sale at the same time in the same place all competing for non-existant buyers.
And if times get really tough the BTL brigade will be down the council begging them to put any sort of 'tenant' into their properties in order to pay the bills.