Buying a new build - is this correct?

iandv

Speaking with sales advisors on a new build today (both barratt and elan homes sales reps) who said you will need 20% deposit to put down so it will pass the mortgage survey, they said that all sites now ask for this

Is this true? I understand you need a good deposit to get a good mortgage rate but not as a requirement for reserving a new home



Any advice would be welcome

silvercar

If you can find a lender prepared to give a mortgage with 10% deposit on a new build, then nothing to stop you doing so.

I suspect that the builders are wary of buyers not being able to get a mortgage. The probelm with a new build is that it is perceived to lose value immediately you take possession (a bit like driving a brand new car off the forecourt), so from a lenders point of view and early repossession could leave them out of pocket.

Another way of looking at it is that the price is high because you will be the first owner, you are paying a premium for that and the lender will never be able to retrieve that.

iandv

So with this in mind it seems as though the builders know that their list prices for their homes are overpriced. So is it worth asking for 15% off their list price?

With the sale of our house we would have a 25% deposit to put down, but I dont want to pay over the odds, as people keep saying its a buyers market at the moment as many people have not sold their homes

The best we have been offered is 5% discount and carpets included but this was without even pushing too much, I would settle for around 10 - 15% off - any ideas on the best way to approach this to get an improved deal?

silvercar

Depends on the builder, their cash flow, their schedule, etc

Block near me went on the market at £225k, no-one bought so instead of lowering the price they rented the lot out for a year and are now selling them as the tenants leave. They are getting over £200k now.

Best time to get a discount, anecdotely, is either to be the first to buy or the last. The first will be seen as an encouragement to others, the last means they can shut the show home and move off site.