How much to offer on a new build

Jewel_2

Well, we're hitting the new build market. We have just sold a 1850s cottage, and we cannot afford the next step up just yet, so in the meantime we are buying a new build. On looking around some last weekend, we came across a nice one, not built yet, for £302,000. It seemed very reasonable to me, and I was told the prices were low because the surveyors had undervalued them, so they had brought all the prices down.

What percentage of reduction to new builds work with, ie, would it be fair to offer at a 10% reduction? Are builders just trying to get rid of them at the moment, they all seem very cheap.

Thanks.

BitterAndTwisted

Honestly, I wouldn't dream of buying a new-build never mind one at that price. If you're looking to live in it for at least five years it might be worth your time and money but for a period less than that you might not get what you think you should.

I'd go in with something insulting, like 30% off the asking price. They can only say no

Jewel_2

Hi Bitter - that's interesting (genuinely, have no idea of the new housing market!). Why wouldn't you buy a new build, is it because they are going down in value so much? We are thinking of maybe staying there for a few years and then turning it into a buy to let, in our area we have lots of head offices and properties are rented out quickly. It's a relatively big house - 4 beds three bathrooms etc. What don't I know? Is there something dodgy going on? x

BitterAndTwisted

Partly because the resale value is less that you might think and partly because they often appear to be made from cardboard. The idea of being on a new development with few local facilities doesn't hold much appeal for me, it's very like suburban American life and they're sterile deserts where you never see anyone on the street because everyone has to drive everywhere but at least in the US people actually know and talk to their neighbours.

There's also the issue of possibly living on a building-site, which I'd hate.

Some chums of mine bought a new-build a while back and there were lots and lots of problems with the build and when they sold it HPI hadn't had as much of an effect as they'd hoped. They're now in a solid Victorian house in a proper community, which they love

VeronicaElectronica

I would certainly offer a significant amount below asking...esp if it isnt built yet. with new builds needing at least 20% deposit, they will be desperate to shift them. As the other person says, at least 30% less. Do a lot of research first about other new builds in you area

skintlass

New builds don't necessarily need 20% deposit - I checked with my mortgage provider and they need 15% deposit. Also, there are pros and cons to new builds, take a look at the snagging forums for both.

VeronicaElectronica

The %'s must have changed since i was looking. But yes i agree, pros and cons with new builds. the one i tried to buy was not in negative equity and i would have been very happy there for a long time, but, nothing you can do about the way lenders operate i'm afraid.

emam

hi, i have lived in a new build for 8 years and loved it! just sold and bought another from bellway! our new house was on for 279,000 and we got it below 250000 and the annoying 3% stamp duty threshold! Mind this took weeks of haggling, but we feel we have walked away with a good deal! we knew the site well and had monitored it for close to a year! the deposit for new builds is 15% and at the moment only nationwide and woolwich are offering mortgages on new builds, and their rates are not great! however this could change!
all the best and i hope you get a good deal!:o

Jewel_2

Is that really true only 2 lenders take on new builds? We were warned by the building developers that one lender would only value the new houses as repossession value. Blimey. Why only new builds (I say this somewhat naively, seeing as my house is over 150 years old!).

I want windows that fit, heating that works and doors that close - perhaps I won't get this with a new build either :eek:

May go and live in a caravan :cool: or :rotfl:

Muhasib

By all means make an 'insulting' offer but don't assume that all the developers are so desperate to offload the property, be aware that they may always parcel up part of a development for a higher price to a social housing provider if they can agree a lesser discount, this is often more attractive as it cuts the cost of the marketing and admin. This practice is less attractive to those private buyers who have already bought and wanted an 'exclusive' development.

If you search you'll find that this more common than you might think.

Also the Homes & Communities Agency have already awarded £2.8bn between Dec 08 and March 09 to Housing Associations and developers which will be partly used to buy up unsold stock (eg £154m to Catalyst, £153m to London & Quadrant).

Kyrae

We're in the process of buying a new build off plan and have approached a few lenders and none had a problem with it being a new build, though one lender said they don't like new builds if they come with money based incentives as it complicates matters.

We tried negotiating but couldn't get any money off, just some carpets thrown in for free, as they said they come in with low prices to sell off plan then raise the prices later. True to their word, they have since put the prices up. Don't bank on getting any money off, just do your research and check the prices are similar to the prices that houses are currently selling for in the area

Jewel wrote: »

Is that really true only 2 lenders take on new builds? We were warned by the building developers that one lender would only value the new houses as repossession value. Blimey. Why only new builds (I say this somewhat naively, seeing as my house is over 150 years old!).