new build developer security

interestedparty_3

We are looking at a new build property (3 bed town house) currently being built on a small development in a decent area of south east london. It is being developed by Bryant who are owned by Wimpy Taylor.

Given the press in the last couple of days about the state of Wimpy Taylor's solvency, we are curious to know what happens if a developer goes under before completion, but after selling a number of properties on a development (several are already sold).

We understand there is an insurance paid by the developers which steps in an completes in this situation, but am keen to understand the reality and extent of this. Can anyone offer any wisdom?

poppysarah

Don't buy anything not built yet. Too many nightmares posted on here about people waiting months/years for things to be built. Read the back pages of this forum for more info.

geoffky

everyday someone comes here asking for help because they bought offplan and its now worth a hell of a lot less than they paid...dont go there

Incisor

interestedparty wrote: »

We are looking at a new build property (3 bed town house) currently being built on a small development in a decent area of south east london. It is being developed by Bryant who are owned by Wimpy Taylor.

Given the press in the last couple of days about the state of Wimpy Taylor's solvency, we are curious to know what happens if a developer goes under before completion, but after selling a number of properties on a development (several are already sold).

We understand there is an insurance paid by the developers which steps in an completes in this situation, but am keen to understand the reality and extent of this. Can anyone offer any wisdom?

With the insurance, your worst nightmare would be the developer NOT going bust, but mothballing the site to remain in business.

Many here would advise against going ahead at all with a new build and I would tend to agree. Put that aside, and I still say that you MUST put in place a long stop get out clause. You must also avoid signing a contract for completion after the date of expiry of your mortgage offer. And you must avoid using a solicitor appointed by the developer.

These requirements [the first 2] set the bar so high that you might not be able to get a deal. Don't be tempted to compromise.

interestedparty_3

Thanks All - my problem is we really want a New Build, and that the location and house are perfect. We also believe we can get the property for considerably less than similar size houses in the same area are currently selling for. We won't be moving forward to negotiate until Jan 09 so we can let the market play out for a little longer (and see if Wimpy Taylor survive!) - and would be fairly relaxed about waiting up to 9 months after that to move in.

Can anyone find a silver lining here or is it really that cut and dried?

Premier_2

Once you've exchanged, the property will be covered by the NHBC (or equivalent) guarantee for new properties.

In the unlikely event the developer goes bust, NHBC (or equivalent) will ensure your property is completed and available for purchase.

Don't expect the property to stay available for another 2 months - if it does think carefully about buying it at all as no one else obviously wants it!