Flat rent before you buy deal...advice

rh203 · 13 February 2011 at 11:30PM

iwantahome wrote: »

then it sounds like your mind is made up. Go for it and enjoy.

I do agree that the apartment finish looks extremely good. But personally I wouldn't touch it as it is just stuck in the middle of an industrial estate. 2 miles further down the river and i'd be there in a heartbeat, as the try before you buy scheme does sound good. But it is just a bit to close to those questionable council estates to feel safe walking back there late at night.

It would be interesting to see in 12 months once people have enjoyed their tenancy how many of them take up the offer to buy and take their rent back as deposit and how many look for something else or just continue to rent knowing they can leave without the hassle of trying to sell this on. My bet will be that it will be extremely difficult indeed to get people down there to look as it is quite a way out of the way and further down the river you can currently buy a 2 bed flat for £115k and a 1 bed flat for £110k within spitting distance of the bridges that will take you over to Newcastle.

good luck with whatever you decide.

I'm not sure what council estates you mean to be honest, as far as walking around, I wouldn't walk back from town at night for example and would just use a taxi.

Would you be able to provide an actual example of a flat further up the river for those prices with the same standard of finish..just out of interest? All I can find is Baltic quay areas that are a lot more money and a lot smaller from what I can see. There is some trade off of distance vs quality but I think it's justified after physically visiting the flats. I do agree that on Google Earth, it looks a bit out of the way, but practically it's an acceptable trade off for the standard of the place - (underfloor heating, fully furnished, fully integrated kitchen, so on ..so on..)

rh203 · 13 February 2011 at 11:35PM

Typhoon2000 wrote: »

Is a new build, still a new build after it has been rented out for 12 months?
If you going to need need to rent a place anyway, there seems little to lose on this deal. In 1 year you can decide if it is still right for you.

That's one of the things I've been looking into to be honest, some lenders class it as non-new build after 6 months of being lived in, some after 12 etc. so I wouldn't need to declare it as a new build on those grounds I guess. Also, as far as the price dropping, if it dropped to say 90k, I'm fairly certain that If I told the developer I was going to walk away if they didn't drop the price following a surveyors opinion they would drop the price anyway as they would have to in order to sell it on in that climate anyway. Failing that, £7k for a year, risk free on the quayside as a young pro, maintenance cost free in a fully furnished flat paying less than a terrace in heaton....yes please :rotfl:

iwantahome · 13 February 2011 at 11:59PM

rh203 · 14 February 2011 at 12:11AM

iwantahome wrote: »

http://www.rightmove.co.uk/property-for-sale/property-28578289.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E544%26insId%3D2%26minPrice%3D80000%26maxPrice%3D120000%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E544%26maxPrice%3D120000%26minPrice%3D80000%26previousSearchLocation%3DGateshead%26radius%3D0.0%26searchLocation%3DGateshead%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-1.61821%2C-1.58950%2C54.95973%2C54.97000%26popupPropertyId%3D28578289%26mapType%3DMap&fromMap=true

http://www.rightmove.co.uk/property-for-sale/property-32115002.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E544%26insId%3D2%26minPrice%3D80000%26maxPrice%3D120000%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E544%26maxPrice%3D120000%26minPrice%3D80000%26previousSearchLocation%3DGateshead%26radius%3D0.0%26searchLocation%3DGateshead%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-1.61825%2C-1.58954%2C54.95973%2C54.97000%26popupPropertyId%3D32115002%26mapType%3DMap&fromMap=true

http://www.rightmove.co.uk/property-for-sale/property-32021126.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E544%26insId%3D2%26minPrice%3D80000%26maxPrice%3D120000%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E544%26maxPrice%3D120000%26minPrice%3D80000%26previousSearchLocation%3DGateshead%26radius%3D0.0%26searchLocation%3DGateshead%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-1.62327%2C-1.59456%2C54.95645%2C54.96673%26popupPropertyId%3D32021126%26mapType%3DMap&fromMap=true

http://www.rightmove.co.uk/property-for-sale/property-26624278.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E544%26insId%3D2%26minPrice%3D80000%26maxPrice%3D120000%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E544%26maxPrice%3D120000%26minPrice%3D80000%26previousSearchLocation%3DGateshead%26radius%3D0.0%26searchLocation%3DGateshead%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-1.62327%2C-1.59456%2C54.95648%2C54.96675%26popupPropertyId%3D26624278%26mapType%3DMap&fromMap=true

http://www.rightmove.co.uk/property-for-sale/property-25160195.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E544%26insId%3D2%26minPrice%3D80000%26maxPrice%3D120000%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E544%26maxPrice%3D120000%26minPrice%3D80000%26previousSearchLocation%3DGateshead%26radius%3D0.0%26searchLocation%3DGateshead%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-1.62327%2C-1.59456%2C54.95650%2C54.96678%26popupPropertyId%3D25160195%26mapType%3DMap&fromMap=true

http://www.rightmove.co.uk/property-for-sale/property-27578195.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E544%26insId%3D2%26minPrice%3D80000%26maxPrice%3D120000%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E544%26maxPrice%3D120000%26minPrice%3D80000%26previousSearchLocation%3DGateshead%26radius%3D0.0%26searchLocation%3DGateshead%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-1.62327%2C-1.59456%2C54.95653%2C54.96680%26popupPropertyId%3D27578195%26mapType%3DMap&fromMap=true

http://www.rightmove.co.uk/property-for-sale/property-16064367.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E544%26insId%3D2%26minPrice%3D80000%26maxPrice%3D120000%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E544%26maxPrice%3D120000%26minPrice%3D80000%26previousSearchLocation%3DGateshead%26radius%3D0.0%26searchLocation%3DGateshead%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-1.62327%2C-1.59456%2C54.95655%2C54.96682%26popupPropertyId%3D16064367%26mapType%3DMap&fromMap=true

http://www.rightmove.co.uk/property-for-sale/property-32511428.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E544%26insId%3D2%26minPrice%3D80000%26maxPrice%3D120000%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E544%26maxPrice%3D120000%26minPrice%3D80000%26previousSearchLocation%3DGateshead%26radius%3D0.0%26searchLocation%3DGateshead%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-1.63576%2C-1.60705%2C54.95258%2C54.96286%26popupPropertyId%3D32511428%26mapType%3DMap&fromMap=true

http://www.rightmove.co.uk/property-for-sale/property-31434896.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E544%26insId%3D2%26minPrice%3D80000%26maxPrice%3D120000%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E544%26maxPrice%3D120000%26minPrice%3D80000%26previousSearchLocation%3DGateshead%26radius%3D0.0%26searchLocation%3DGateshead%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-1.63576%2C-1.60705%2C54.95258%2C54.96286%26popupPropertyId%3D31434896%26mapType%3DMap&fromMap=true

http://www.rightmove.co.uk/property-for-sale/property-32574311.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E544%26insId%3D2%26minPrice%3D80000%26maxPrice%3D120000%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E544%26maxPrice%3D120000%26minPrice%3D80000%26previousSearchLocation%3DGateshead%26radius%3D0.0%26searchLocation%3DGateshead%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-1.63576%2C-1.60705%2C54.95258%2C54.96286%26popupPropertyId%3D32574311%26mapType%3DMap&fromMap=true

Whilst I am not claiming that the specification of any of the flats I have found here are equivalent to the flat you have found, they are closer to gateshead/newcastle and this will be used as a selling point later on down the line. These were found with a 2 min search.

Personally underfloor heating would not be a deal breaker for me, as flats tend to be warm anyway due to the other flats around them, and it is just one more thing to have to maintain and spend money on.

As you say the distance is a good trade off for you and that is fine, but others may not be quite as easy to persuade later on, afterall the newly finished high spec interior won't be quite as high spec when it is 2nd hand.

If you like the look of this then try it, you have nothing to lose at the end of the 12 months as you would have paid the rent somewhere else anyway. Just be sceptical when parting with money to buy as whilst you may be happy buying there, it is not a desirable location on the quayside. Rentals closer to town can also be found for around £550-£600 too.

Hi, Agreed, the first couple on there are nice, however, I'm aware that Ochre Yards has seen it's fair share of problems due to maintenance issues and values have plummeted as a result. (Yes, this could happen with any new development, but does link in with the prices somewhat). I also looked at Staithes but to be honest, the finish doesn't even come close to Friars Wharf. Overall, I can't get a mortgage on any of those as I have no deposit and would be renting with no prospect of getting anything back afterward, whereas with Friars I can sit tight for a year, enjoy living there and then decide what to do in twelve months... That's my thinking anyway!

I do understand where you're coming from Re: resale value / location etc, but again I'd be able to speak to people who perhaps rent, see who's renting them from investors and also see what people do after the twelve month period is up...

rh203 · 14 February 2011 at 12:31AM

Forgot to mention, we did actually speak to a few people on the site who are already renting them from private landlords - so they clearly rent out okay!

rh203 · 14 February 2011 at 5:04PM

What is the best measure for the 'value' of a flat or home in general in order to compare to similar properties in a similar area? I would guess £/sqM / Foot as a top level way of comparing?

iwantahome · 14 February 2011 at 6:40PM

Do you have the prospect of saving up 15-20k for a deposit in the 12 months? Alongside the cost of renting and the cost of living and socialising too? The 6.5k would cover the fees and a small portion of the deposit. But ideally you would still be looking to have the extra to cover your 20% deposit at the end of the 12 months.

Whilst some lenders will give you an 85% or even 90% deal, this will cost extra in the monthly payments.

Look into your budget and see if saving the extra deposit needed is viable. If it is not then just rent and make the most of any repairs having to be paid for by somebody else for a few years and look to buy when your deposit is high enough that your mortgage won't be such a large portion of your take home pay. If it is a viable option then thats great, you are lucky to be in that position.

A property can only be "worth" what someone is willing to pay for it.

You'd be looking at £625 savings each per month on top of all bills etc to make the 15k.
The take home salary of someone earning 21.5k is approximately £1340 after student loan.

rh203 · 14 February 2011 at 6:52PM

iwantahome wrote: »

Do you have the prospect of saving up 15-20k for a deposit in the 12 months? Alongside the cost of renting and the cost of living and socialising too? The 6.5k would cover the fees and a small portion of the deposit. But ideally you would still be looking to have the extra to cover your 20% deposit at the end of the 12 months.

Whilst some lenders will give you an 85% or even 90% deal, this will cost extra in the monthly payments.

Look into your budget and see if saving the extra deposit needed is viable. If it is not then just rent and make the most of any repairs having to be paid for by somebody else for a few years and look to buy when your deposit is high enough that your mortgage won't be such a large portion of your take home pay. If it is a viable option then thats great, you are lucky to be in that position.

A property can only be "worth" what someone is willing to pay for it.

You'd be looking at £625 savings each per month on top of all bills etc to make the 15k.
The take home salary of someone earning 21.5k is approximately £1340 after student loan.

Hi, yea I've worked it all out. Family are likely to help too but I have been in touch with a mortgage advisor who is a friend of mine and said that I'm more than likely to be able to get a mortgage on the flat with just a 10% deposit due to lenders varying definitions of 'new build'..i.e lived in for 6/12/18 months and the effect that this has on how much deposit they want. He also said that the markets for mortgages are likely to be much more open in 12-18 months and that would also go in my favour. My salary won't stay at 21.5k for longer than 6 months from speaking to people and rises steeply so that all goes toward saving. I have no loans whatsoever either so nothing to worry about there.

vxross · 22 March 2011 at 7:36PM

Hi rh203,

Did you go ahead with this in the end? and up's/down's since (if you did) ?

Just I'm viewing a 2 bed place next this weekend with a view to doing the same as you proposed... If you did go ahead could you let me know about any admin/bond fee you had to pay, and also although there is an allocated parking space for each apartment are there plenty 'visitor' spots or not? as me and my room-mate are both drivers... ?

Cheers in advance.

Ross

monkeymikey8126 · 10 September 2012 at 6:06PM

Hey,

I've just applied for this recently. After much umming and arring I've decided to go with it and also want to leave more information for any future interested parties on here as there isn't any info anywhere that I can find!

So, here we go.

Basically, like has already been explained, you rent the place for 12 months with the option to purchase on completion of that period. You get all of your rent, plus your bond (equal to one month rent) back to use towards a desposit - but only if you go ahead and buy, if you decide not to buy you get nothing back.

The typical price for a 1 bedroom is around 108k with a £550 pcm rent and a 2 bedroom is way up at 140k with a £700 pcm rent. The 2 beds are much bigger though. Now, the 'gifted deposit' equates to roughly 6 per cent. Given that most banks require at least a 10 per cent deposit you clearly also need to save the 4, or so, per cent during the period of rental. Something to think about.

The purchase price is agreed at the point of rental, at which a £300 non refundable deposit must also be paid, to cover credit checks and whatever else they can think of I guess.

There is no service charge for the apartments until you buy (ie. you don't pay during your rental year) and then it is in the region of £900 a year.

The 1 beds are council tax band A and the 2 beds are band B.

Something else to bear in mind if going for a 2 bed is that, as they're over 125k, they are subject to Stamp Duty at 1 per cent. So, a little bit more saving to do on top of the 4 per cent and solictors and mortgage fees.

Something of interest possibly too, I was informed that planning permission has been granted for an 8 storey accomodation builidng (assume more apartments) and retail units on the current site of the elephant on the tyne hotel (on the doorstep, so to speak). Word of mouth though so I have no idea how much substance there is in that.

At the time of typing this there are something like 4 flats left and then they're all gone so it's proving reasonably popular.

I'm waiting for my credit check to come back and, as I have no adverse stuff on there, am assuming it will all be well. Otherwise its £300 down the gutter!

I'll post an update once I know more.

Flat rent before you buy deal...advice

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