Advice on buying a new build apartment!

T-faz

Hi,

I am looking to obtain some advice on buying a new apartment that I have viewed recently. I am not sure what would be the best course to take so I thought of asking members on this helpful forum for some advice.

Before I detail some information about the apartment, I would like to provide some information about myself. I am a 24 year old male who is in the management team of a successful and growing medium sized business. I currently earn £25,000 per annum and I get quarterly cash bonus which adds a couple thousand extra to my pay. I am expecting to get a pay rise this Summer when I will be promoted, but I am not relying upon what might be but what is.

Now to the property, I have seen a new build apartment local to me. Its a small one bedroom house priced at £135,000 and is available through the NewBuy scheme (95% mortgage). I am contemplating opting for the scheme so that I can get on the housing ladder and use this apartment for a few years to come.

My credit history is good and I don't have any unnecessary expenses. I would ideally like to spend around £600 on a mortgage, monthly, and this would leave me with enough for travel, savings etc.

I am very much interested in acquiring this house, and the time is right for me to move forward. Should I go through with this or should I wait a while before buying a house?

Please provide me with some helpful input that I can use to decide this matter.

Thanks for your help!

phill99

If you are looking for 95% on mortgage, that is over £128k. This will cost you far more than £600 a month. You might need to adjust your expectations.

michelle2008

I agree - this is a big mortgage for your income level. Have you done some research - even plugged your stats into some mortgage calculators?

I

sirmosh

You'd be looking at a minimum of £750 a month I expect but more than that you'd be borrowing a lot compared to your income.

rentergirl

Having lived in a newbuild, I would check the value carefully: the standards can be very poor, and when repossessed (often in BTL bankruptcies) they sell for half their original price. They are also: small, not storage etc. Not a great foot on the market. Can you buy an older place with a friend?

GlynD

I'd be inclined to try and get at least 10% deposit down. The first couple of years in any new build can be daunting, especially when it's your first purchase. The price of the flat sounds ok but you're going in at too high a mortgage in my opinion - I'm with you all the way however. I wish I'd done it when I was your age.

19lottie82

rentergirl wrote: »

Having lived in a newbuild, I would check the value carefully: the standards can be very poor, and when repossessed (often in BTL bankruptcies) they sell for half their original price. They are also: small, not storage etc. Not a great foot on the market. Can you buy an older place with a friend?

for once, rentergirl speaks the truth.

new builds are overpriced, small, usually of poor quality and you are very likely to lose money on your investment.

as the others have said, try to save up a 10% deposit and buy an older property.

Chimpofdoom

Don't forget about Factor Fee's!

Also you'll need to check with who you get a mortgage from about how much deposit they require for new builds.

RBS for an example, require a 25% deposit for any property built after 2006... found that piece of info out quite recently!

Edit: never mind about the mortgage part, I'm guessing the property developer will have someone providing finance.

But as previously said.. new builds not worth the cash!

Bufger

I bought my first house a couple of years ago at the age of 25 with a 128,000 mortgage 90% LTV. on a 5.99% 5 year fixed rate i'm paying £822 per month and at the time I was on £27k per year. Let me tell you with bills and any unexpected payments you will be struggling very hard and you wont have any holidays or many nights out and thats if anybody will even give you a mortgage.

After shopping, regular bills you'll be looking at another £300 minimum without factoring in your car, fuel or travel costs.

With 95% LTV you'll also be at risk of the new build having an actual value much less than the cost you paid for it and you'll be paying for a few years without getting any increase in equity (you mention being there for a couple of years).

Acc72

Rather than give a lenghty reply I would say do a lot of research on "small" 1 bedroom new build apartments (this site is a good start).

Have you ever lived in a "small" 1 bedroom "apartment" ? - if not, why not rent one for 12 months to see if you like it ?


I am very much interested in acquiring this house, and the time is right for me to move forward. Should I go through with this or should I wait a while before buying a house?


Why are you so interested in this house/apartment ?

I would say that if you have to ask the second question then you are probably not ready (you are committing to spend £138k).

You don't say what your current circumstances are or where you live now.

If you live with family, I would say to spend the next couple of years saving as much as possible (and do lots of research in the meantime).

If you live in rented acommodation I gues you are paying a couple of hundred pounds per month less than this mortgage ? (so again I would say save as much as possible).

dimbo61

So many questions just about the flat.
One bedroom limits market when you need to resell.
2 bedroom and 2 bathroom would be much better as you can then rent out second ( lodger paying upto £4250 a year TAX free) under rent a room scheme.
No more than 4 storey and must have a lift.
Charges for looking after the hallways,lifts,roof. cleaning ETC ?
car parking ? size of flat
Its 5X your income and you dont have much of a deposit
SAVE, SAVE, SAVE and wait for a while