Are New builds an ideal way onto the property ladder for a 1st time buyer?

Bazshawkins

newbian wrote: »

Sure that's a good point, but there's a reason they're better value. As you say many of them are really unattractive and some are still in the middle of less than desirable areas.

Lucky we bought where we did then, as SE1 is fast becoming one of London's more deisrable areas!

If you're looking in London, you're never far from an undesirable area, or a desirable one for that matter. I've lived in ex Local Authority for the last 6 years - no problems with neighbours, crime, or anything like that. In our new place we've found the community to be top notch so far.

sinbad182

Im just too much of a snob to live in ex LA - no matter how nice a nearby area might be, or how big the property is, it would always be a big old council estate to me.

Shame, because you do get so much more for the money.

newbian

http://www.zoopla.co.uk/property/flat-810/new-providence-wharf/1-fairmont-avenue/london/e14-9pb/7872126

Here is an example of a new build flat in east London - by new build I mean it's about 10 years old.

Sale history
2003 £408,000
2005 £475,000
2007 £575,000
2011 £515,000
2013 value £536,981

Here's one in SE London
http://www.zoopla.co.uk/property/flat-505/maurer-court/mudlarks-boulevard/london/se10-0sz/20998958

Sale history
2002 £350,000
2012 £462,500

I'm just not buying the "new builds don't hold value" story in London.

lindsaygalaxy

Isn't that more to do with house prices though? Im not convinced a new build now is going to make the same amount of money of sold in 10 years time like the examples you have given, if any more money at all.

newbian

lindsaygalaxy wrote: »

Isn't that more to do with house prices though? Im not convinced a new build now is going to make the same amount of money of sold in 10 years time like the examples you have given, if any more money at all.

But what are you comparing it to? The imaginary blocks of 50+ year old purpose built flats? Professionals living alone or without kids are increasing dramatically in London. If they all took your advice no one would own because they'd be saving for a deposit on a 3 bed Victorian semi that they don't even need! There aren't enough older flats for the demand, so buying new is reasonable in London and is not a money losing exercise if you're smart about it.

Ciderarmy1987

newbian wrote: »

http://www.zoopla.co.uk/property/flat-810/new-providence-wharf/1-fairmont-avenue/london/e14-9pb/7872126

Here is an example of a new build flat in east London - by new build I mean it's about 10 years old.

Sale history
2003 £408,000
2005 £475,000
2007 £575,000
2011 £515,000
2013 value £536,981

Here's one in SE London
http://www.zoopla.co.uk/property/flat-505/maurer-court/mudlarks-boulevard/london/se10-0sz/20998958

Sale history
2002 £350,000
2012 £462,500

I'm just not buying the "new builds don't hold value" story in London.

Going back pre-crash really muddies the water. you cant compare the housing market now with the housing market in say 2005

newbian

Ciderarmy1987 wrote: »

Going back pre-crash really muddies the water. you cant compare the housing market now with the housing market in say 2005

If that's the case then the answer on new builds is one knows, because there won't be many properties built post 2008 that are for sale now.

Fire_Fox

lizzay wrote: »

Hi all,

It’s my first time posting, so I'm hoping to get some helpful advice , I just wanted to know if buying into new builds is a good idea? I am a 23yr old recent graduate, with no responsibilities (bar student loan); and have always dreamed of owning a property since I can remember; and I am currently looking at the attractive prospects of new builds.

My ideal plans regarding property would be to buy into a new build in London to which I would like to live in for a few years and then rent it out, I have done some reading into whether or not I could rent out a place and the answer has been yes once the loan has been paid (though I may need to double check that).

Does anyone think it wise to buy a new build or just wait until I can afford to by a property in the future which seems like 10years away?

Any advice is welcomed as I am trying to get a wider perspective on this before applying to the bank of mum and dad

Apply to bank of mum and dad for what, a loan? You would have to declare this to your lender, it would be classed as a debt so negatively affect your credit worthiness. Lenders want no string money and evidence you are capable of budgeting and saving up not evidence you are skilled at tapping your parents.

As well as a 10% deposit you need money to do the place up (new builds have no lamp shades, toilet roll holder, towel rails, toothbrush holder, hooks on the back of doors, curtain poles or curtains, shelves in the airing cupboard, plants in the garden, all the little stuff you take for granted) PLUS at least three months mortgage and insurance payments in case your circumstances change (SMI kicks in after three months but can take longer to process).

You would have to apply for consent to lease to let in the future and no guarantees you would get it. Also don't underestimate the incredible amount of legislation that comes with landlording, it's a time consuming and risky profession not an easy route to free money.

Properties that have the best yield (ratio between rental income and outgoings) are not necessarily the ones you are going to fall in love with, your dream starter home. And many people find it really difficult to let go of somewhere that was their home and is filled with memories, and treat it as a business, they have too high expectations of their tenants or don't allow them the 'right to quiet enjoyment'.

Consider what you would do if your tenant did not pay rent or trashed the house, and you still had to cover the mortgage PLUS your own housing costs. Or if you fell ill or injured and could not work, DWP/ council treats the rent as income so you don't get numerous means tested benefits. Or unplanned pregnancy or redundancy. Even with a planned pregnancy you'd still be a landlord, you can't just tell the tenants to live with a water leak or no heating because you feel constantly nauseous or exhausted.

lizzay wrote: »

Thanks again, i'm just going back and fourth in my mind; i know i want to rent that i am sure however I'm at the stage where i just want to move out of the parents house so i would really love to live in my own property and then rent it out later. Its just as you can imagine i want to make sure that if i do get a new build i can do this adequately and whilst i am fairly young, i feel as though getting a non new build is out of my reach (for the short term anyway) however the issues that "seem" to arrive with new builds is really off putting. How has your experience been ?

If you are living with your parents, start economising and save up a decent deposit, you will likely never have life this easy again. http://www.stoozing.com/msoc/soacalc.php
Spend weeks on MSE learning how others live on a shoestring for a year or two to save up far more than you would expect on their income. Being impatient and over borrowing is exactly how many people get into negative equity or end up unable to cope and at risk of repossession.

I got married at 22 and bought my first property at 23: I don't regret it but I did have to grow up very quickly, it was a lot less fun and a lot more stress than I imagined. Holidays and nights out were relatively rare, made our own lunches for work for a good while and had a strict budget for clothing and toiletries. And that was with two wages coming in, one very good one. With the benefit of hindsight it would have been much better to have some savings behind us.

YoungBusinessman

As Fire Fox's concluion, do not underestimate having savings behind you before you go for it.

We only put down just over 10% deposit....we have since spent that again, doing the place up to a better standard, removing asbestos, woodchip and cat !!!! smelling lamanite flooring. Obviously you wont have any of these with a newbuild but you will have a totally blank canvas that needs a personal touch. I get the impression you are stretching yourself way too far and that is why you have mentioned bank of mum and dad(which has to be declared/deposit needs to be proven where it was sourced from through bank statements and payslips to match) and the lowest (5%) deposit you can get away with now adays.

Don't hurry into owning property as you will soon find yourself without it.

l0u1se

If your parents gave you the money as a gift/present, would they still class it as a loan?