How much is the average deposit on a new home?

MadelinesMum

Hi all,
I'm in the process of selling and buying a house but unfortunately my house is taking a little longer to complete. I have reserved a new house (Abbey homes) and paid £500 but now they want a 10% deposit (new house is £180k). My house should complete in the next few weeks but Abbey have given me until 25th June to pay the deposit, which is extremely stressful for me because I haven't got that amount laying around. I also think 10% is a bit steep - my solicitor also agrees.

Does anyone know the going rate for deposit percentage? Also, the house hasn't even been built yet

Any advice greatly appreciated
Caz
xx

Hippychick

Personally I think 10% is actually a bit low nowadays. To get a mortgage especially on a new build you'll need at least 20% i'd imagine.

Do you have a mortgage in place? if the house hasn't been built yet and they are demanding 10% by Thursday alarm bells would be ringing for me.

Do you want to risk the possibility of exchanging contracts paying 10% deposit then finding that you can't get enough of a mortgage to buy the place once it's built?

It has happened ALOT recently in this current economic climate and I must have lost count of the number of threads started by people who have exchanged and paid 10% deposit on a new build to then find they then can't get a mortgage so end up losing thousands.

MadelinesMum

Hi, no there's no mortage. A lady from Australia is buying my home for cash so realistically it should all go through smoothly. I do not have a mortage. x

JayneG

Hi,We paid 5% at exchange on our new build - they originally asked for 10% but were fine when we said we'd just be putting 5% down (Persimmon)

Pssst

If you trot along to https://www.firstdirect.com you can get a quick quote for mortgages.

For instance, quote £180,000 interest only,FD will only lend £135,000. that leaves a deposit of 45,000. By my shaky sums that makes 25%.

MadelinesMum

Hi, once my house sells I'll have the cash to buy the new house so there will be no mortgage. Do you think, that being the case, Abbey will reduce the deposit?

pinkshoes

Why don't you just phone up Abbey, point out you'll be a cash buyer, and negotiate with them? If they refuse, you could always threaten to pull out and lose the £500. PLENTY of other houses on the market...

JayneG

Pssst wrote: »

If you trot along to www.firstdirect.com you can get a quick quote for mortgages.

For instance, quote £180,000 interest only,FD will only lend £135,000. that leaves a deposit of 45,000. By my shaky sums that makes 25%.

The OP is not talking about a mortgage downpayment, she is referring to the deposit required by the builder on exchange of contracts.

Gwhiz

I am assuming the 10% deposit s at exchange? If so just keep moving it back until you have the money - your solicitor should be good at it if he/she is a good one!

franklee

Do not exchange contracts on the new build until you have exchanged contracts on your sale. Use the deposit on your sale that you will receive at exchange of contracts to pay for the deposit on the new build you are buying. Really your solicitor should tell you this. I hope you are using your own solicitor and not one in the builder's pocket.

Where are you going to live while the property is built? Be prepared for the value of the property to be less by the time it's built and for the build to be delayed. Really buying off plan at such an early stage isn't a good idea these days.

Jonbvn

franklee wrote: »

Where are you going to live while the property is built?

This is the critical point. It could take years to complete and you would have no legal recourse.

Given that you will be a cash buyer, you are in the driving seat. Do not let the developer dictate to you. In the present climate they will back-down.