Buying new build house

Herbie118

Hi

My husband and I are looking to buy a new build house in a village outside of Cambridge. It's a very popular development so they are selling fast. The house we are looking at is £250,000.

I'm just looking for any advice you may have on what we could possibly negotiate on? This is our first house and have never had to deal with large housing companies.

We will have the 10% deposit but would love to negotiate to get something more for our money!

Any tips/advice are welcome!
Thank you.

kingstreet

You'll struggle to get a mortgage at 90% on a newbuild.

Are you using Help To Buy or Newbuy?

Either way, other cash incentives are going to be a no-no and will often be excluded from the valuation by lenders.

gazzabboi

If its a popular development you will be lucky to get the house for £240k, if not you could try £230k. Just start low, then work your way up.

Personally I wouldn't consider buying a house for 250k with only a 10% deposit, I would be looking more in the region of £200k as my maximum budget. Borrowing £225k is far too much. You need to save a bit more.

OddballJamie

gazzabboi wrote: »

Personally I wouldn't consider buying a house for 250k with only a 10% deposit, I would be looking more in the region of £200k as my maximum budget. Borrowing £225k is far too much. You need to save a bit more.

Bit of a daft assumption when you don't know all the facts, for all you know they have £100k+ combined income and have been paying high rent or only started saving for a deposit recently.
I agree a 10% deposit isn't going to get them the best rate on a mortgage, but the amount being borrowed will be down to affordability.

OP - As the developer will want to keep the sale price high for Land Revenue, you may be better trying to get a 5% gifted deposit and a load of fittings and carpets included, maybe stamp duty too.

gazzabboi

OddballJamie wrote: »

Bit of a daft assumption when you don't know all the facts, for all you know they have £100k+ combined income and have been paying high rent or only started saving for a deposit recently.
I agree a 10% deposit isn't going to get them the best rate on a mortgage, but the amount being borrowed will be down to affordability.

OP - As the developer will want to keep the sale price high for Land Revenue, you may be better trying to get a 5% gifted deposit and a load of fittings and carpets included, maybe stamp duty too.

I'm not disputing how much they can afford, I'm just saying I personally wouldn't borrow so much. A couple of examples -
They borrow 225k over 25 years at 5%, total payable= £394598 (
£169598 paid in interest)

They borrow 175k over 25 years at 5%, total payable= £306910 (£131910 paid in interest)

The difference is 169598- 131910= £37688. Personally id rather stick it out saving for a couple more years than throw my money to the bank in interest charges:money:

Ciderarmy1987

gazzabboi wrote: »

I'm not disputing how much they can afford, I'm just saying I personally wouldn't borrow so much. A couple of examples -
They borrow 225k over 25 years at 5%, total payable= £394598 (
£169598 paid in interest)

They borrow 175k over 25 years at 5%, total payable= £306910 (£131910 paid in interest)

The difference is 169598- 131910= £37688. Personally id rather stick it out saving for a couple more years than throw my money to the bank in interest charges:money:

Has he really just posted saying that if you borrow more money then you have to pay more back!!!!! By your logic why not only borrow 150k or 100k or 20k?????

I do think that there is an advantage of buying at a lower amount and getting a better LTV though, but it one of the things you need to weigh up against, location, size of house, garage etc. Is up to you to decide what to compromise on!

dimbo61

The developer will be keen to sell at £250K as that way the next property can also be sold at £250K
So you need to ask for stamp duty to be included and other items, carpets, curtains, fencing, grass, landscaping, garage, etc

wymondham

£1/4 million.... how much land do you get for that in the area?

Mobeer

Find out when their end of financial year is - they might want to get a sale or two before this ends and there could be room for a deal.

droiderm

Do you have a lender in mind?
For example check their allowed incentives, for example, new buy.
Nationwide for example don't allow any financial incentives, but will allow white goods/carpets and obviously money off the price.

In my short experience , any deal will depend on

1) If your on a scheme which costs the builder money, i.e. NewBuy costs the builder. However, they still may offer stuff on top of that.
2) Is the site selling well? If it is, they probably won't offer anything as they don't need to. But, they often have money off on the list price which they will give everyone.
3) If it's "off plan" they are unlikely to be in a rush, or desperate.
4) If it's built, and approaching their year end , you might have some strong negotiating to be done. But, it's they will expect you to move quickly, eg end Of June.

retepetsir

wymondham wrote: »

£1/4 million.... how much land do you get for that in the area?

Probably not much as it's in Cambridge.

Around here in SE England you'd only be looking at a 2 or 3 bedroom semi for that.