FTB negotiations on new build

Treadmill

wymondham wrote: »

theoretically yes, but what happens when you factor in those big price drops?

Renting will make even less sense as house prices drop because buying becomes cheaper and so mortgage payments become less ? Rents won't come down with house prices, unless thats a new phenomenom, I don't remember it happening before. In fact as I recall rents went up because there where more people (Ie Evicted after repossesion) looking to rent, B&Bs where doing great business housing people with the DSS picking up the tab.

tootiefrooties

for fun?! no... i just wanted advice on negotiating with a developer as opposed to people selling their own houses. Thank you for your advice though.

I am most definitely not rich, but the monthly cost of mortgage and rent for this new build is cheaper than renting a similar property in the same area. So it seems to make sense for us.

I have of course taken on board all the comments about the market falling, and this is exactly why I want to get a good deal on the flat. If we can't get the price as low as we would like (160 would be fab) then we won't take it any further. We had been planning to save for a couple of years and buy in the 'normal' way until we saw this offer.

So thank you to everyone for your help - I will certainly push the point that I don't want to lose money on it, and hopefully they will drop the price.

tootiefrooties

harbinger13 wrote: »

Firstly what you pay as rent - is the same as paying interest for your mortgage - and remember you pay a ton of interest in the first few years.

Of course, interest isn't my favourite part of buying, but the way I see it is that I can spend £X a month on renting privately, every month for the rest of my life, or £X (the same amount) a month until I'm late 40s, early 50s, and then be mortgage/rent free for the rest of my life. So the earlier I start paying it off the better! So the interest is high at first, but at no extra expense to me, and is better value than renting in the long-term. Plus there are the immediate benefits of owning a property like more privacy, security, choices (re: utilities, decor, pets etc.) and all the rest of it.

We just went to have a look at the development ahead of the appointment anyway, and the one we had our eye on isn't as glittery and magical as the brochure suggests (shock horror! :rolleyes: ), but one of the others is stunning. It's priced at 198k, so unless we can get it below stamp duty threshold, it'll be back to plan A for saving up and buying in 2 years.

ad9898_3

pieface, here is my opinion on your question, offer 30% off the price, simple, they can either except it or not. As far as shared equity schemes are concerned, its common knowledge at how dodgy they are unless your name is Gordon brown but its your money, spend it as you see fit.

Incisor

piefacerecords wrote: »

Gosh, what a miserable lot you are! I'll ask for advice from people who live in the real world, where people actually buy houses to live in, not hang on for years and postpone progress in their life just to save a few quid.

4 more years of renting = about £35k of dead money. I'm hoping we can get 10% off the developer's price and get one of the properties for about £166k. You can't be serious telling me that 4 years time, a nearly-new 2 bedroom apartment with private parking in the middle of Brighton is going to depreciate so badly that it would have been more worthwhile to rent and wait and rent and wait... Of course, in a few years I might come back with my tail between my legs, feeling very silly - but even then, there is a right time to buy for the market, and a right time to buy for a person / family. They don't always coincide, but i know which is more important to me!

"Renting is dead money" is the mantra of the boom times. When housing prices are in decline, it is a falsehood. With average house prices declining by something like £3500 last month, by renting at £500, you are better off by a net £3000 against the purchase of an average house. If you owned an average house, you would be worse off by £3500 plus your mortgage. In both cases, you would have a roof over your head, but after a month of renting you are considerably better off.

As for shared ownership, there are all kinds of catches. Basically it is a way of getting you to pay nearly full market value for the property, but accept just 50% of ownership. It all starts to go wrong when you try to sell, because 5 years form now, you will be selling a 50% share when people will be able to afford 100% of a property. So you may sell a 50% share for 35% value. But that could leave you in negative equity. There are many traps for the less than financially astute [ie the target market], depending on the exact details of the scheme.

If you want to buy and your mind is made up, then go ahead. I detect a slight shirtiness on your part about the advice you have been given. The advice given by others is meant to help you, if you want advice that pleases you, you may pay dearly for it.

ad9898_3

Incisor wrote: »

"Renting is dead money" is the mantra of the boom times. When housing prices are in decline, it is a falsehood. With average house prices declining by something like £3500 last month, by renting at £500, you are better off by a net £3000 against the purchase of an average house. If you owned an average house, you would be worse off by £3500 plus your mortgage. In both cases, you would have a roof over your head, but after a month of renting you are considerably better off.

As for shared ownership, there are all kinds of catches. Basically it is a way of getting you to pay nearly full market value for the property, but accept just 50% of ownership. It all starts to go wrong when you try to sell, because 5 years form now, you will be selling a 50% share when people will be able to afford 100% of a property. So you may sell a 50% share for 35% value. But that could leave you in negative equity. There are many traps for the less than financially astute [ie the target market], depending on the exact details of the scheme.

If you want to buy and your mind is made up, then go ahead. I detect a slight shirtiness on your part about the advice you have been given. The advice given by others is meant to help you, if you want advice that pleases you, you may pay dearly for it.

Amen to this, there are so many people about now who share opinions like the ones in the above post, its just a shame none of them work in the government:rolleyes:

hethmar

Whilst I can see in the "now" that renting may look a better idea than buying - after 25 years of renting you would own nowt. At least at the end of that time if you have paid a mortgage you would have your own bricks and mortar to do with what you will. And during all that time you wouldnt be at the whim of the landlord.

Have had a look at those shared ownership deals now and oh, I dont like them. It seems to me a way of having someone maintain your house for you but then you get a large cut of of the sales price when they sell up.

tootiefrooties

Incisor wrote: »

If you want to buy and your mind is made up, then go ahead. I detect a slight shirtiness on your part about the advice you have been given. The advice given by others is meant to help you, if you want advice that pleases you, you may pay dearly for it.

Sorry, the only reason I'm being "shirty" is that I have to keep justifying my position which I find tedious and frustrating! I understand why people are giving that advice, but I had specifically asked in original post for ideas on price negotiation, not to be told it's a bad idea- I already know the risks and that most people on this forum wouldn't buy now.

The only thing I wasn't aware of is a poor reputation in new-build quality. I only know one person who has bought a new build, and she's very happy with it, and I hadn't heard they are shoddy. Is this often the case? I know they have a "10 year buildings warranty" and 2 years of free service/repairs but I thought that because they were new they would be pretty solid! hmmm.

Can't be too bad though, I once moved into a house which had dinner-plate size fungus growing on the walls, and no windows in the panes.... in february! (My mum's purchase years ago, before anyone tells me I have a history of bad decisions :P)

maryotuam

At a simplistic level I can understand you wanting to enjoy the much improved accommodation you will get for the same money you are paying in rent now. However in 5-10 years when prices become stable again, you might be stuck with a liability i.e. a mortgage/loan that noone wants to take off you. Whereas with renting you can start from scratch without a millstone round your neck.

If you do decide to go for it, remember that other stunning properties will be coming on the market at even better prices as time goes on and new build companies are going to become increasingly desperate. If they don't play ball on decent reductions, considering how the market is, just walk away even if only for a couple of months. I bet they will be ringing you!

Treadmill

Builders have generally stopped building or are only finishing up what they have already started so in a few years when the market picks up and they start building again there will be far fewer new builds so supply and demand will push the price up and the builders cash in.

People are talking like builders are desperate to sell propertys right now, this is not the case in my experience because they do not need to sell them to start the next development as there is no next development, plots are selling quick around here because the supply of new builds is now finite as far as the next few years ago. also builders have already taken the write downs so are in no major hurry to release the capital, You'll get a nice discount on a new build but they are by no means giving them away with packets of cornflakes. You'll get a 20% discount because they have already priced this in, they are still making a packet though.

Some people might hypothesise differently but as a buyer of a new build have recent experience of the reality, I've negotiated with several builders this year before finally settling on a deal that I found favourable.