Help to Buy Scheme - New Build Negotiation

Gb109590

Evening all,

I'm hoping someone on here may be able to offer some advice on purchasing a property on the new government scheme, Help to Buy?

I have been putting some figures together and think I am in a position to be able to buy a new build property later in the year. I have done all my research and spoken to an IFA who confirms I meet all the required criteria for the Help to Buy scheme and now its just a matter of deciding when, where and what I would like to buy.

I am just wondering if anyone has any experience buying under the scheme or similar government help schemes and particularly what sort of price negotiation is achievable? Can you still negotiate when purchasing through the scheme and what discounts and savings have other people secured?

The house I am looking at is £184,000 so I am wondering what offer to make and if the fact that I am purchasing through Help to Buy makes any difference in terms of being able to haggle!

Any help, thoughts, advice would be greatly appreciated.

Many thanks

dgtazzman

Also in your position, willing to buy under the scheme later this year or beginning of next year, when the scheme gets expanded to existing properties. From other posts here, I gather haggling on price under the scheme is possible, but builders tend to use the scheme as an excuse not too, even though it costs them nothing.

I've resigned myself to not really hitting them on price, but negotiating hard on the extras (carpets, turfing, kitchen fittings, possibly 5% gifted deposit) as the builders seem more willing to take a hit on that as it doesn't reflect on the sale price of the house for the rest of the development.

I'd personally probably would rather have 5% gifted deposit to take the size of the equity loan down, than have an immediate discount on the property anyway, as long as a mortgage could be secured for their asking price...

fragmast3r

ive just got a taylor wimpey house (well move in to in 4 weeks) have had house knocked down from £219.995 to £211,995, they are paying my valuation fee and £650 towards solicitors fee's , the house is coming with carpets throughout (kitchen bathrooms vynl) turfed in rear.

before that, we "almost" went with barratts, smaller, not as nice as the TW one, £210.000 , uncarpeted, no turf, no discounts and no fee's helped with.................. and not even a smile/please or thank you, so I walked out of the meeting we were having to do the reservation, and glad we did, there's discounts to be had.

Noddy32

We've just negotiated price down by £25k plus £2k towards extras. Builder wants to complete end of June as half year end. We were originally told no incentives.

Gb109590

Thanks all.

Noddy32 was your purchase a new build through the Help to Buy scheme? What was the name of the developer and where abouts in the country are you buying?

Fragmast3r that Taylor Wimpey sounds a good deal, I think it will obviously vary based on the developer and what else is available in the area!

The house I'm looking at is a Bovis home in Norfolk, its on a massive development with Barratt, Bovis, Wimpey, and about three others so hopefully if Wimpey are doing it then the others will have no choice! They are expanding with another 1000 homes so something has got to be possible!

Dgtazzman some good ideas there, I would imagine 5% would be possible and great idea using to reduce the equity loan although I think I read you need to do 10% at a time. Those extras cost them next to nothing so I think if you're buying off plan or before its complete you should be able to pick and chose the best stuff! I agree it should definitely be possible to get the price down as the scheme has no effect on the money the developer receives! I think I'm going to start 15% less and walk out and see if they call, none of them are built yet so there's no hurry and there's so many properties on development. At least starting at a cheeky low price and them not contacting you tells you it was never a possibility rather than being annoyed thinking could I have saved another 5 or 10k!

Has anyone else had experience with the scheme or sonething similar that is willing to share with us novices? Any advice or tips will be greatly welcomed.

kingstreet

You could not combine 5% builder's deposit with HTB. You'd need to have it treated as a simple price reduction instead.

dgtazzman - don't confuse current HTB - Equity Loan with the HTB - Mortgage Guarantee scheme which starts in January. That is more like the current NewBuy scheme and will provide 95% mortgages on second hand homes, not equity loans.

FWIW NewBuy will end when HTB-MG starts as it will no longer be needed.

You qualify for HTB - EL at 20%, 10% or 0%. You don't get to pick and choose the level. This is determined by the HCA Shared Equity Calculator used by the HCA HomeBuy Agent to whom your reservation and PIF is sent on reserving a property.

If anyone wants a copy of the calculator, PM me your email address and I'll send you a copy. It's an XLS file.

Noddy32

I've sent you a PM re your question.

Relocationrelocation

I have just bought a house using Help to Buy - we managed to negotiate money off the price of the house, as well as all white goods and floorings which were all within the acceptable parameters of what incentives are allowed on the scheme. They won't be able to pay your stamp duty but deals CAN be done, so it's definitely worth shopping around and seeing all the developers on the site before you make up your mind.
Touch wood, so far the process has been really smooth, so good luck.

dgtazzman

I wasn't confusing the two, I merely remarked we might be using the part of the scheme that starts in January to avoid the price markup of newbuild. I'm aware that the part of the scheme that starts next year simply offer mortage providers a guarantee of 15% of the purchase price, allowing (in theory) people to take out 95% LTV mortages at 80% LTV rates.

There is another thread running that confirms for the current HTB scheme Halifax has written 5% of the purchase price into their terms for builder incentives in any form, so I'm guessing other lenders will also have similar terms in place. Means the total value of any incentives can have a total value of maximum 5% of the purchase price. I think somebody in there did mention they allowed gifted deposit within that 5%, but I'm not 100% on that.

dafman

Relocationrelocation wrote: »

I have just bought a house using Help to Buy - we managed to negotiate money off the price of the house, as well as all white goods and floorings which were all within the acceptable parameters of what incentives are allowed on the scheme. They won't be able to pay your stamp duty but deals CAN be done, so it's definitely worth shopping around and seeing all the developers on the site before you make up your mind.
Touch wood, so far the process has been really smooth, so good luck.

Why cant stamp duty be paid for by the builder as part of the negotiation? I don't see this mentioned in the rules of "Help to Buy"

ging84

dafman wrote: »

Why cant stamp duty be paid for by the builder as part of the negotiation? I don't see this mentioned in the rules of "Help to Buy"

The main reason they can't pay stamp duty is because it is ultimately cash back, £200k property with £2k stamp duty paid by the builder means you've really only paid £198k, but are asking for a 20% loan on the full £200k. The whole deal gets submitted to the local agents for the help to buy scheme for approval.
From what i was told anything such as furnishing and fittings are easily justified but solicitors fees, stamp duty, removals fees etc much less so, but there is a certain amount of discretion involved.