New builds

tyros_2

Are new build properties still as likely to sink in value as they were say, 12 months ago? I've been speaking to a developer and have eventually gotten them to take 20% off their price and I now have 20% of that available for a deposit. Does this sound typical? Are lenders likely to go along with this?

tyros_2

Anyone have an idea on this?

almillar

Well a builder that's trying to sell you a house is always going to be a bit biased - but no-one can really answer your question. My personal feeling is that we've hit the bottom, or are no more than 10% away from the bottom, but I'm totally unqualified! New builds apparantly haven't taken such a big hit as 'second hand' houses, probably because of less risk involved with chains. If you can afford to move, can get the loan, want that house and don't plan to move quickly again, go for it!

bingibongi

almillar wrote: »

New builds apparantly haven't taken such a big hit as 'second hand' houses, probably because of less risk involved with chains.

& what makes you say that. New builds are awful value for money and always depreciate fast. Why do you think lenders will only lend 80% or less on new builds - its because the lender knows they will fall in price.

Oh, & they're all made of cardboard and will probably fall down in the slightest wind !

figgles

bingibongi wrote: »

& what makes you say that. New builds are awful value for money and always depreciate fast. Why do you think lenders will only lend 80% or less on new builds - its because the lender knows they will fall in price.

Oh, & they're all made of cardboard and will probably fall down in the slightest wind !

I have to disagree there! It depends on the property and the builder. I've owned 4 houses from new, 2 of them were good quality but didnt go up much in price for the times I was in them, my previous one was excellent quality and the one I'm in now is superb quality. You get what you pay for, and if you spend £100K on a new build, it's not going to be super quality, however spending £300K plus on a new build and you are going to expect quality (although these figures are relative to where I am in the North West, quadruple those figures for London :rotfl:)

Buying a house isnt like buying a car, you dont lose money as soon as you move in unless you are unfortunate enough to buy when the market is dropping which does happen on occasions, but it goes up long term.

koexelek

bingibongi wrote: »

& what makes you say that. New builds are awful value for money and always depreciate fast. Why do you think lenders will only lend 80% or less on new builds - its because the lender knows they will fall in price.

Most lenders hate new builds, and will usually only lend 80% of the price after any builder incentives have been taken into account

robfuzzard

I'm currently in the process of buying a new build made by Persimmons and my dad (who has 35 years experience from being an architect) says the quality of the build is excellent. However, we went to view a Barretts new build and he said how poor the quality was compared to Persimmons.

Back on topic of the value of new builds, I'm finding rather conflicting arguments on the site when it comes to this. Our new build is built in a great position in one of the better districts of Portsmouth. When we first moved to Portsmouth, when the housing trade was at its highest, 3 bedroom houses in poor locations were going for about £230,000. Hell, a two bedroom flat in a good part of Portsmouth in this present climate is still going to set you back £175,000. Our build is a 3 bedroom semi detached, opposite a park, garage and parking space and the full price is £204,000. Some people on here are saying I'm being conned because its a new build and I should wait until the winter. Others are saying that it is highly dependent on the area but a new build's value isnt necessarily going to change if the market drops a bit further. Personally, I think it's a fairly good time to buy a new build if you can get someone to give you a mortgage for one. I wouldnt view it as a long term investment, but there have been worst times to buy a property. New build or not.

Idiophreak

bingibongi wrote: »

& what makes you say that. New builds are awful value for money and always depreciate fast. Why do you think lenders will only lend 80% or less on new builds - its because the lender knows they will fall in price.

Oh, & they're all made of cardboard and will probably fall down in the slightest wind !

Lenders only lend 80% because they make the same stupid, sweeping assumptions you do.

Looked around a lot of new builds when buying ours recently - even from a complete noob's perspective, the difference in quality between builders is *vast*. I share robfuzzard's view on the couple he mentioned, but saw a number of new builds of much higher quality than any of the "major" builders, including the one I'm living in now.

As to "awful value for money", that's laughable, frankly. We paid something like 5 or 10k more for ours than you'd expect to pay for the same property "second hand"...Nobody would bat an eye lid if you bought a property then spend 5 or 10k putting in new bathrooms and kitchen...To say nothing of the fact that our new home is designed with energy efficiency in mind (89iirc on the EPC), so running costs are markedly less than the "well built" older properties many people on here bleat on about...

tyros_2

Thanks for the comments. Does anyone have a list of lenders that currently do 80% LTV on new builds as I know some of them are 75%.

RufusA

tyros wrote: »

I've been speaking to a developer and have eventually gotten them to take 20% off their price and I now have 20% of that available for a deposit. Does this sound typical? Are lenders likely to go along with this?

Just to clarify, a discount on the price cannot be counted as a deposit. For example a property being priced at £200,000 and sold for £160,000 will require a 20% deposit of that £160,000 i.e. £32,000.

The mortgage will be based on the selling price, or valuation, whichever is lower. Any incentives offered by the builder will have to be declared and will be taken in to consideration when valuing the property.

Unless you have a large real deposit it will be very hard to get a mortgage on a new build!

As to whether they'll drop further or not depends a lot on the area, demand, quality of build and desperation of builders. Some new builds have lost 50% of their "value" in the last two years. Others have held up pretty well.

All IMHO - Rufus.

Idiophreak

RufusA wrote: »

Just to clarify, a discount on the price cannot be counted as a deposit. For example a property being priced at £200,000 and sold for £160,000 will require a 20% deposit of that £160,000 i.e. £32,000.

The way I read the OP it sounds like they have 20% of the new, lower price to use as deposit...