Negative equity and overinflated new-build price?

Building_Surveyor

Unless your looking to make this new build your forever home I'd say time to get back to reality. Have you not explored the possibility of renting your flat out?

The most sensible option of course would be to over pay on your mortgage.

And ditto to the above comment. The developer has made it an attractive deal by over inflating the value of your flat. If you know this why would you even consider purchasing this new house.

kts0x0

We don't know that the house is overinflated for definite, it is just a suspicion based on a few Internet searches we have done for property of similar size, age and location. As previously mentioned, an independent valuation will cost quite a bit and we really do not need to move right now. The benefit of doing so is that if the house is fairly priced and it holds its value we may be able to sell it for what we bought it for and thus have bought ourselves out of the negative equity we have right now. If the house is not worth anything like what the developer is asking for it though, we will be in more negative equity. It's a risk either way. I hope this makes sense

R_P_W

kts0x0 wrote: »

We don't know that the house is overinflated for definite, it is just a suspicion based on a few Internet searches we have done for property of similar size, age and location. As previously mentioned, an independent valuation will cost quite a bit and we really do not need to move right now. The benefit of doing so is that if the house is fairly priced and it holds its value we may be able to sell it for what we bought it for and thus have bought ourselves out of the negative equity we have right now. If the house is not worth anything like what the developer is asking for it though, we will be in more negative equity. It's a risk either way. I hope this makes sense

Spending a few hundred to find out is surely worth it?

The developer isn't going to give it away is he....if he is paying you more for your flat than he can sell it on for then he must be making the money on the price of the new house.

Mobeer

An independent investigation is pointless, because the builder can just ignore it. I think you already know that the price being offered is high, as is the trade-in offered.

You would be better off asking for a realistic 80k trade in value and a 192k sale price. That sounds more like a sale price in keeping with a premium property in the area. This would give the builder the same profit margin and require a smaller stamp duty payment from you. Honestly though I think you would be better to pay down your current deficit rather than buying somewhere more expensive.