What is a reasonable 'long stop date' on a new build flat?

db316

Hi there-

We're buying a new build flat which has an estimated date of completion of Mid-2014 which suits us fine. We're no hurry and could even wait another year after this before completing.

However, the 'Long Stop Date' for the property is listed as End of 2019; over 5 years after the estimated date of completion.

Is this _normal_? We plan on challenging this if we can with our solicitors.

Richard_Webster

2014 - must be a wonderful flat if you were prepared to wait that long!

I hope you are a cash buyer and are getting it cheaper because it is not finished. Even if you really liked the flat, you didn't tell the builder's people that did you? There was another flat that you liked, but as this one was cheaper (it was, wasn't it) you were prepared to go with it and wait a bit.

If you need a mortgage you are not going to get a mortgage offer that will last into 2014, let alone any longer. Your longstop date should be no later than when your mortgage offer expires.

A few years ago a lot of people really did get caught, particularly on new build flats, when they bought off plan exchanging contracts long before the flats were ready, and by the time they were ready to complete, the flats had gone down in value and lenders would not lend the amount the buyers needed. They had exchanged contracts, assuming that a mortgage would be available. Foolish assumption.

db316

Hi there-

Thanks for the tips!

We are getting the property cheaper than comparable properties in the local area - yes. In our negotiation we also got a parking space included, which we're pleased with as it's in zone 1 in london.

Haven't got a mortgage offer yet; but both my partner and I have good credit (and enough salary) and will look into mortgage options next year.

we pay 10% in cash now and then the mortgage on completion. We're making sure we have a buffer in case the value falls. There is a slight risk but the area we're buying in seems to have enough pent up demand to keep that risk down (but there is a risk, agreed).

The developer has built some nice and popular places around london/canary wharf. We are happy with the price we're paying for where the location is. it's really hard to buy here, places get sold within days but we're happy to wait for the right place rather than just get something because it's available.

I just wondered what should be 'reasonably expected' in terms of a long stop date, and what room for movement we would have?

db316

So can anyone help with my question?

Estimated Completion Date is Mid-2014, and Long Stop date for completion is End 2019 - is this reasonable contingency?

DVardysShadow

db316 wrote: »

So can anyone help with my question?

Estimated Completion Date is Mid-2014, and Long Stop date for completion is End 2019 - is this reasonable contingency?

I would not give them more than 18 months lee way. If I was at all interested in this deal.

By 2019 we will be 12 years away from the last house price crash and things will be stoking up nicely for the next one. If that happens, all the developer has to do is sit on his hands while holding your money, let the long stop sail past and sell for newly inflated prices.

GDB2222

You tell the builder what long stop date you will accept, and they say yes or no.

I think that you are being rather unwise to ignore the excellent advice from Richard.