Mortgages for New Build Flats

JJmcClure

Hello everyone

Do any lenders do 90% mortgages for new build flats?

I can't find one anywhere, they all seem to want a 30% deposit

Cheers in advance

Mrs_Bumble

Nobody does 90% LTV on new build flats, think that max is 75%,

berniebeyer

try the halifax

you may need 15% though.

i'm in exactly the same boat as you!

_Andy_

Fast-track to negative equity.

jade1986

I have said it a few times on here..

Nottingham Building Society do 95%.. on new builds as well

Mrs_Bumble

This is a new build flat and as they are seen as a greater risk of negative equity because there are so many of them the max LTV is always lower than for new build houses where the risk is seen as slightly less.

ILW

Problem is a new build carries a primium. Assuming the market is static, the minute you move in the place goes from new to second hand and thereby drops in value. The lenders need to ensure they have the security of not lending more than the value.
Moral - Don't by a new build unless you have the spare cash for a big deposit.

JJmcClure

Thanks everyone

So if I am looking at a new build with prices listed at £163,000, and I have a 10% deposit (assuming Nottingham Building Society are potentially interested)...

Should I be looking at getting the price massively down?

I'm new to the house hunting lark - how is it a fast track to negative equity, and how does the difference in size of deposit change this?

Thanks

PS: The new build is near London - Orpington, Kent. 17 mins from London Bridge.

_Andy_

New builds, and especially flats, have performed badly during the downturn.
Once you buy, the value drops straight away - similar to when you buy a new car.
Yes you could put down more deposit to protect against negative equity but this isn't going to change the fact that it probably isn't a good investment.

The fact that mortgage lenders want a large deposit for new-builds should be telling you something - i.e statistically they're a big risk.

It's up to you but if you do decide a new build is for you, have a think about what might happen if you want/need to sell (or indeed change mortgage lenders) in the next couple of years and can't due to lack of equity.

JJmcClure

Thanks again

Certainly food for thought.

Is it worth putting in a really low offer? Or does that effect the equity in the future for the worse as well?

_Andy_

You're welcome.

You can effectively put any offer in you want - might be worth you researching to see what properties on that development have actually been sold for.