Where to start?

JimBlizz

Hello all!

I know this is a common question but I thought I'd seek the forum's opinion.

I am a FTB (buying due to new job and overpriced rental market) currently looking at a new build 1 bed flat by George Wimpey.

The flat is listed at £79,995 and to be fair it seems like a reasonable price, however, I know this is a buyers market and George Wimpey need cash. I know of an estate agent thats listing another flat in the building of the same type at £75,995.

What would your opening offer be? I'm thinking of knocking 15-20% off the price for my opening offer? Should I knock of more?

Thanks!
Jim

poppysarah

Do you plan on living in a flat for the next 15 years?

penguine

In my opinion, no one should buy a 1-bed flat unless they're 100% certain that they want to remain single and childless for the rest of their life. A 1-bed flat is the kind of property you should rent, not sink your savings/earnings/future earnings into. Don't think of it as getting your foot onto the property ladder -- with prices continuing to fall as the recession deepens, you'd be sliding down the property snake.

JimBlizz

I appreciate the point you are making, and it isn't lost on me.

My problem is that I can't afford to rent an equivalent size flat in this area. I want this to be a home and as such I would like to be able to take more than a sleeping bag and a pillow.

One option I have should I go into negative equity is to rent the property out. This may yet be unworkable but the point of my question was to establish what sort of of price I could get such a property for, this will then aid my decisions.

Thanks,
Jim

penguine

Why would renting out your property help you if you get into negative equity?

Your lender may not allow it, and you may also be unable to get enough in rent to cover your mortgage.

ajay_182

I almost brought a New 2 bed 'Luxury Aparment' 12 months ago. It was on their so called sale. Reduced from £125k to £115k. Sounded a complete bargain. I went and viewed it. Talked finance etc... Then I had an issue putting my deposit together and it didnt happen. It was the best thing that happened to me. Id be in that box flat now. Mortaged to the hilt. Probably in negative equity and if I wanted to move,no-one would buy it anyway. On your rent idea, im no expert in anyway, but dont you think hundreds of people have thought of that? How many are up for rent now? How many will be up for rent in the future? Rent prices are going down and if you could rent it out, it probably wouldnt cover your mortgage.

Honestly. Dont do it. It would be a mistake as I know people who have done it and regret it deerley!!! The best advice ive had on here and from friends is to save. Save a good deposit and then buy sensisble. See where the market goes. In 12 months time you should be able to afford a 2 bed house with more savings. Thats where I am now and so glad I did. Its my opinion though mate, just be careful and good luck!

JimBlizz

Valid points, but given that I certainly could not afford to rent and save at the same time I could be a little stuck there.

:wall:

Jim

LittleMissAspie

Are you sure that's the full price? Round my way ALL new builds are shared ownership (or other similar scheme).

Do you have a deposit?

Could you rent a room in a shared house for a while?

JimBlizz

They are the full price (I have viewed, and have a copy of the price list). I have a deposit, more than 10%

Renting a room was an option and while it would stop me getting up a silly hours to get to work it would lack any ability for me to make it a permanent home.

There are some two bed flats on another development nearby (that I have yet to look at) but the asking price is nearly £20k more than I'd like to spend.

penguine

If a permanent home is important to you, sit tight and wait. Prices are predicted to fall another 15-20% this year (and that's the optimistic forecast).

Do you have a deposit? The size of your deposit is going to determine how affordable a mortgage you can get. Have you talked to an IFA to find out what mortgages are available to you?

JimBlizz

I have a mortgage broker who is looking at whats available to me (due a call back today in fact).

He did mention that in the recent past banks were a "bit iffy" about lending against new builds because they were so overpriced. This is the main reason I asked my original question.