FIRST TIME BUYER? - What About the 2nd Time Buyers??

Chris_Panes

Hi,

My wife and I have recently been disappointed by the news that our new build Redrow Home has been sold to a first time buyer :mad:

We put our 2 bedroom home on the market early this year. Within 5 days we had sold it GREAT! :j Upon selling, we put a deposit on a Redrow Home that was to be complete in June. Unfortunately 5 weeks later, our buyer pulled out having bought another 2 properties which he require capital to renovate them. Our home went back on the market and we have had great interest and 2 viewings every week but unfortunately no offers since . Redrow have been fair and gave us a time frame in which to sell our home before they had to actively push ours. Last week was the deadline and 1st time buyers who were in a better position than us because they had no chain purchased our property and we lost our deposit and solicitors fees as a result £900+ :eek:

The problem is, the government is offering 5% deposit to first time buyers which is great. But this is only for "New Builds" If first time buyers wanted to buy our home they would be required to put 10% which results in £12,000 deposit. First Time buyers were able to buy our £170,000 Redrow Home for £8,500 deposit. Why would any first time buyers buy our home when they can have brand new for a smaller deposit??? It's a NO BRAINER REALLY!

The question I have is "Why doesn't the government offer 5% deposits on any property not just new builds?" They only seem to favour the house builders but, if they were able to purchase my property with a 5% it would result in £6,000 deposit not the £12,000 required now.

This would also help the house builders as we'd be able to purchase one of their properties and more likely to purchase a 4+ bed rather than the 2 or 3 first time buyers can only afford.

HELP! I'm pulling my hair out at the government only helping house builders, build more houses that can't be filled.

Many Thanks

kingstreet

The MIG part of Help To Buy, so 95% mortgages on second hand properties can be offered starts in January 2014.

CLAPTON

Chris_Panes wrote: »

Hi,

My wife and I have recently been disappointed by the news that our new build Redrow Home has been sold to a first time buyer :mad:

We put our 2 bedroom home on the market early this year. Within 5 days we had sold it GREAT! :j Upon selling, we put a deposit on a Redrow Home that was to be complete in June. Unfortunately 5 weeks later, our buyer pulled out having bought another 2 properties which he require capital to renovate them. Our home went back on the market and we have had great interest and 2 viewings every week but unfortunately no offers since . Redrow have been fair and gave us a time frame in which to sell our home before they had to actively push ours. Last week was the deadline and 1st time buyers who were in a better position than us because they had no chain purchased our property and we lost our deposit and solicitors fees as a result £900+ :eek:

The problem is, the government is offering 5% deposit to first time buyers which is great. But this is only for "New Builds" If first time buyers wanted to buy our home they would be required to put 10% which results in £12,000 deposit. First Time buyers were able to buy our £170,000 Redrow Home for £8,500 deposit. Why would any first time buyers buy our home when they can have brand new for a smaller deposit??? It's a NO BRAINER REALLY!

The question I have is "Why doesn't the government offer 5% deposits on any property not just new builds?" They only seem to favour the house builders but, if they were able to purchase my property with a 5% it would result in £6,000 deposit not the £12,000 required now.

This would also help the house builders as we'd be able to purchase one of their properties and more likely to purchase a 4+ bed rather than the 2 or 3 first time buyers can only afford.

HELP! I'm pulling my hair out at the government only helping house builders, build more houses that can't be filled.

Many Thanks

Basically government 'support' distorts the market and overall is a hinderance rather than a help.

Unfortuantely, help for 'first time buyers' seems to be popular with people who do not understand the inevitable unintended consequences.

We don't need any assistance from the government to get the housing market, instead we need them to stop interferring with the lending criteria which stops banks lending to totally solvent people... but that doesn't make a good headlines.

moneyistooshorttomention

The consolation to this "help the houseBUILDERS" way of looking at things the Government is doing currently is all the threads on here commenting on how high the premium is that builders place on brand new properties.

In my own area, for instance, I can see that an equivalent brand new house costs round about £50,000 more than my Victorian one (currently up for sale for £170,000).

Why would anyone want to pay £220,000 for a starter house, when they can buy a secondhand one for £50,000 cheaper?

Also why would anyone want to buy a house that is in a location that is neither convenient or countryish - because that's where these brand new houses are here (ie plonked in an inconvenient AND unattractive location away from facilities).

Look at it this way - I was studying a house that had been up for sale for quite some time in my area (ie about 4-5 months) and wondering why on earth it hadn't gone pdq at its original price of £185,000. It's a modern (but not brand new) one, semi-detached, garden and garage and passable location. It should have gone within weeks. It's now had its price cut a few weeks back to £175,000 - absolute bargain - and then I checked out its location more carefully. The location is a more peripheral one here and up one heck of a steep hill and then I understood - having climbed that hill myself at one point to view a house up there:eek:. Since we live in an area where bus fares are dear - there's the explanation in one...and I cant see FTB'ers here wanting to be somewhere where they haven't got so much as a corner shop, only JUST walkable (if you're fit and have time) or maybe not walkable at all and having to pay our level of busfares to get around anywhere and then sell the house on to someone else in a few years and find they cant recover that New House Premium.

ValHaller

moneyistooshorttomention wrote: »

Look at it this way - I was studying a house that had been up for sale for quite some time in my area (ie about 4-5 months) and wondering why on earth it hadn't gone pdq at its original price of £185,000. It's a modern (but not brand new) one, semi-detached, garden and garage and passable location. It should have gone within weeks. It's now had its price cut a few weeks back to £175,000 - absolute bargain - and then I checked out its location more carefully. The location is a more peripheral one here and up one heck of a steep hill and then I understood - having climbed that hill myself at one point to view a house up there:eek:. Since we live in an area where bus fares are dear - there's the explanation in one...

Lots of new builds are being built on flood plains. So over time, the problem of properties on steep hills will resolve itself.

moneyistooshorttomention

ValHaller wrote: »

Lots of new builds are being built on flood plains. So over time, the problem of properties on steep hills will resolve itself.

Oh yes...I forgot that one....indeed quite a few of our newbuilds/proposed newbuilds are indeed on floodplains.....:cool:

Wandering off calculating "Well - make that an extra £50,000 cost to buy it, and then over £1,000 pa extra on insurance possibly and lose a New Build Premium when selling it on and then there's our busfares....."

japmis

As a FTB, I avoided new builds like the plague. A new estate near where I rent is fondly known as "negative equity alley"; even when I went to NW about a mortgage, they said that they ask for 15% minimum deposit (as opposed to a 10% deposit on anything else) because of the premium price tag attached to a new build. It's like buying a new car, drive it off the forecourt and it instantly drops in value.

As for the government schemes, it's primarily to help kick-start the construction sector into building something. Like moneyistooshorttomention said, it's all about help for the house builders.

Give me a 2 bed Victorian terrace any day.



*waits for barrage of abuse for avoiding new builds*

Dan-Dan

japmis wrote: »

*waits for barrage of abuse for avoiding new builds*

I wouldnt have thought so!

quite apart from the financial side of purchasing a new build , round our way , they are all building sites , yet have thousands of people living chek by jowell with diggers and site offices , cant stand it myself

DRP

japmis wrote: »

As a FTB, I avoided new builds like the plague. A new estate near where I rent is fondly known as "negative equity alley"; even when I went to NW about a mortgage, they said that they ask for 15% minimum deposit (as opposed to a 10% deposit on anything else) because of the premium price tag attached to a new build. It's like buying a new car, drive it off the forecourt and it instant drops in value.

As for the government schemes, it's primarily to help kick-start the construction sector into building something. Like moneyistooshorttomention said, it's all about help for the house builders.

Give me a 2 Victorian terrace any day.



*waits for barrage of abuse for avoiding new builds*

Absolutely.

A new-build is a huge risk imo.

At least with a 'used' house there is solid market data for that particular house/street/location.

Building_Surveyor

nothing wrong with new builds if thats what your after and a) your going to stay there long enough to build equity b) you put a big enough deposit down. not everyone buying a new build opts for 5% deposit or government help. The risk with negative equity applies to all houses not just new build, and low deposit mortgages carry the same risk. Buying at the wrong time can equally carry that risk.

thelem

Chris_Panes wrote: »

The question I have is "Why doesn't the government offer 5% deposits on any property not just new builds?"

One of the major reasons for the price of property (at least in the south) is lack of supply. This policy is aimed at shifting new build houses so the developers build more. I'd have thought more second time buyers would benefit through reduced competition for older homes than will lose out through new build projects selling out.