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High deposits for new builds

easton4803
Posts: 5 Forumite

Hi,
I am looking at buying a new build flat but have been stopped in my tracks by the estate agent telling me that lenders demand at least 25% deposit for buying new-builds. I asked at Nationwide, and the mortgage adviser had to look it up to confirm that this is the case. Does anyone know if this is universal? It seems really strange that new build flats would be out of reach of most first time buyers? Stranger still that the mortgage adviser wasn't aware of this. Am I missing something here?
Also this new government scheme seems to be on certain properties, is this a scheme bought in to fix the above?
Thanks!
I am looking at buying a new build flat but have been stopped in my tracks by the estate agent telling me that lenders demand at least 25% deposit for buying new-builds. I asked at Nationwide, and the mortgage adviser had to look it up to confirm that this is the case. Does anyone know if this is universal? It seems really strange that new build flats would be out of reach of most first time buyers? Stranger still that the mortgage adviser wasn't aware of this. Am I missing something here?
Also this new government scheme seems to be on certain properties, is this a scheme bought in to fix the above?
Thanks!
0
Comments
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You may not find all new build flats come with a 25% deposit for residential purposes. Stop being blinded by headline rates and go to someone with higher rates willing to lend what you want.0
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Banks demand higher deposits after all the builder pricing scandels (gift deposits etc) before the credit crunch. The big builders typically over price as well as a new build price premimum which gets wiped out after sale. The higher deposit is to protect the lender from price falls on the overpriced newbuilds if they have to repossess.
Scheme like Newbuy mean the tax payer takes the risk instead of the bank hence they can use 5% deposits. Its a reckless scheme but the tories need the votes and party is funded by the big builders (corruption I fear).:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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easton4803 wrote: »Hi,
I am looking at buying a new build flat but have been stopped in my tracks by the estate agent telling me that lenders demand at least 25% deposit for buying new-builds. I asked at Nationwide, and the mortgage adviser had to look it up to confirm that this is the case. Does anyone know if this is universal? It seems really strange that new build flats would be out of reach of most first time buyers? Stranger still that the mortgage adviser wasn't aware of this. Am I missing something here?
Also this new government scheme seems to be on certain properties, is this a scheme bought in to fix the above?
Thanks!
If offered, you can get 95% on a newbuild flat via NewBuy, or you can use the Help To Buy - Equity Loan scheme to get a 25% deposit and 75% mortgage.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Banks demand higher deposits after all the builder pricing scandels (gift deposits etc) before the credit crunch. The big builders typically over price as well as a new build price premimum which gets wiped out after sale. The higher deposit is to protect the lender from price falls on the overpriced newbuilds if they have to repossess.
Scheme like Newbuy mean the tax payer takes the risk instead of the bank hence they can use 5% deposits. Its a reckless scheme but the tories need the votes and party is funded by the big builders (corruption I fear).
Are you going to update your sig?0 -
If builders over price new apartment why don't valuers instructed by the banks make accurate valuations for mortgage purposes? Then they can lend at their usual deposit requirements rather than increase if for ne builds.0
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