Help to buy- cost to developer??!

Ryvitaqueen

Hi guys,

Can someone advise?

We are looking to offer on a new build through a well known developer. When we mentioned the help to buy scheme we were told that the offer would have to come up as it costs the developer 6% of the sale price?

Since then I have asked the developer to clarify if this is a charge or if this is their administration costs - where this figure comes from. After several emails back and forth, and me pointing it out as such, there was no actual answer from them. My enquiries were batted away with "if you go into the sales office to discuss we can go into more detail"... I informed them that I have done this and that this 6% cost was all they knew and had called them also, after asking the question and they could not answer... But still no clarification was forthcoming. In fact a sales person said "I cannot go into company finances with you". And that was that... I don't want a huge breakdown, I want confirmation, ideally in an email that this is the cost to them and why headline prices are needed for the scheme. I have no problem increasing an offer but I don't like the house enough to do it based on misinformation, or lack of information possibly being used to dupe buyers into paying over the odds.

I'm an estate agent and my other half a mortgage advisor and this was news to us and the cynical side of us feels this is being used as a way to get headline price on houses, but if it is true then we will factor this in when considering further offers.

All help appreciated!

We contacted the HCA who couldn't advise either way but a chap I spoke to said the price agreed is down to developer (of course) and the cost to lenders on a mortgage for the first charge was ours to pay if stipulated. They gave no indication that this scheme costs "per house" per se.

Thanks!

okborednow

I was told the same thing and quoted 6% also. As far as i could determine they have to pay 6% as some sort of insurance but i could be wrong. I didn't get any money off the asking price but tbh i didn't expect to as it's the best plot in the development. They did throw in flooring throughout and all white goods though so there are some deals to be had

Thrugelmir

okborednow wrote: »

they have to pay 6% as some sort of insurance

This will be an indemnity against a shortfall should there be insufficient equity to repay the loan in the event of a sale. The mortgage company holds 1st charge and therefore will be settled first.

74hotspur

If its the help to buy equity loan it costs the developer nothing, I reserved my plot without telling developer I intended doing htb, went back later and said I had decided to. filled in form and sent off to homebuy agent. this way I was certain that price didn't differ from that of a purchaser not doing htb. You can't get any help for deposit from builder but can get incentives included