FTB - do I buy a new build?

davilown

about to purchase a new house in northamptonshire - i hope!
I want to keep it for about 5 years and intend to have fixed rate for three years.
The asking price for a 3 bed terraced is 122,000 as they are the first houses of 130 in the developement although the builders have said the will give me a 3200 discount, 5% deposit (£5990) and I have £8000 saved for extra deposit.
I thought this would be a reasonable price to pay and only have to take a 105,000 mortgage. Having read some of the other threads here I'm now worried that i will be completely wasting my money and that in the five years, i will lose a substantial amount of money.
Am i being completely naive and stupid or have I just read the previous posts incorrectly?
Could i ask for a larger discount, stay put or buy at the revised asking price?

Any advice would be greatfully appreciated btw the house is a barratt's new build
:beer: monster

sm9ai

People will always say that a crash won't happen. But you have to look at the figures given to you by Barratts.

They have effectively knocked off £9190 off their asking price. Or approx 7.5%. They may rebrand it slightly with different names and stuff but effectively the house has dropped 7.5% in value.

The big question is will it continue to drop or not?

HGLTsuperstar

but you also factor in that the house was probably overpriced by the same % to start with, that's why they can make such offers

distilled

Are you renting or do you have a house to sell? My advice will depend on your current circumstances

davilown

distilled wrote:

Are you renting or do you have a house to sell? My advice will depend on your current circumstances

I'm renting at the mo. Would the price not be cheaper because the house will be in a building site for nearly year?

cheers

:beer: monster

Doozergirl

That's generally the idea. You'll pay less than subsequent buyers as recompense for the fact you will be living on a building site.

My only bugbear with new builds are the 1000s of apartments being built, primarily in city centres, aimed at BTL investors who will make little or no return. Prices are dropping and they're a complete dead end in my opinion.

A regular development of family homes and flats will be affected by the market the same as any other property. If you want to buy a new build as a FTB then go ahead - you'll have no maintenance issues and it's an easy option.

You'll get a better deal if you don't choose the deposit paid option though. You could potentially get more money off the price than the 5% if you can scrape together as much deposit as you can in the time between exchange and completion. You will get bigger discounts if it's all your own money.

Make them a cheeky offer. Try £105,000 with you funding your own deposit completely. They'll come back and say, no but you can have it for x. I'd try to knock them down again or start asking for carpets, fittings etc. I would never be afraid of making an offer that would insult a developer, it's not personal and you should get what you can.

Distilled will come back and offer some more advice I'm sure.

davilown

ok I'm buying in a 'regeneration' area that has been earmarked for a complete town overhaul and this includes a new rail link to the local cities(northampton, bedford, leicester). so far they've built over 1000 houses that in comparison to other local builds. The schools are actually very good and the wife would be a uni just down the road.
So, in short, you are saying that i should refuse the 5% deposit and use my £8000 as the deposit and offer them £105,000. Sorry to repeat what you've said but i need to make clear what i need to do!

:beer: monster

Doozergirl

Erm, yes. If you don't take the incentives you can generally get a better cash discount but you need enough of a LTV percentage deposit that your mortgage interest rate won't be too hard hit - the higher your deposit, the better rate you get.

If you can get the developer's best price without taking advantage of the 5% discount, you can get two mortgage quotes (one using their deposit, one getting a better discount) and work out which is cheaper for you over the long term.

I'm making it even more complicated now! Sorry.

Doozergirl

BTW, think about when you plan to sell. If they are still building when you sell, you will find it hard if you're still up against brand new build.

davilown

Doozergirl wrote:

BTW, think about when you plan to sell. If they are still building when you sell, you will find it hard if you're still up against brand new build.

i don't plan to sell for five years - i'll be at a point then i can leave my current job with a cash lump sum and my wiife will have two yeas post qualfication experience (student midwife at the mo).
after this point , as we both work in the health sector we'll be able to up sticks and hopefully be able to afford a house back down south - unless of course we decide we like it up here that much.
the house builds should be well and truely completed by then

cheers again

:beer: monster

Tassotti

After a quick scan on rightmove, you can buy 3 bed houses for 50K upwards. I agree with doozergirl. Don't purchase a new build, buy a decent 3 bed older property. Make sure you have a full survey done on the place.

Buy a property that you can move into instantly, but has potential. You can then decorate to your own preference. In 5 years when you come to sell, see what the fashios are then, redecorate, fit out the property with the latest furnishings (you can hier these in) abd the sell

Also beware that in 5 years the property may not be worth as much as you thought it was ( differing opinions on this).