Advice needed on buying a new build home

atig

Apologies for the long rant, thanks for reading my post and hopefully giving some advice.

A brief background about me and the development.
I am very new first time buyer (so this whole process of purchasing a house is new to me and yes I have read a lot about it on the internet) I am also not from England but have been here for 10 years now. I live in London and I am considering buying a new build home in London. It's a 3 bed house, spread over three floors (ground, first and second) with 3 'terraces' on each. The house will be ready for possession by Summer 2014. This property is part of a bigger development which has 5 apartment blocks and 8 blocks of 4 houses each and of various configurations (3 and 4 beds). The house that I am considering is priced at 265K. On builder's marketing posters and everywhere else they say 'Help to buy' and 'New buy' schemes are available.

When I first went for viewing they showed me a marketing suite. Next, I was told a little about the house buying process.

Quoting everything that they told me on my first visit.

• We don't have 'help to buy' available on houses but you can go for new buy scheme.
• They told me about the price and said if you don't go for any schemes we can drop the price to 250k so you only pay 1% stamp duty.
• I also talked about the apartment blocks just out of interest, so they gave me the information.
• They told me the services charge and ground rent for the apartments (around 1.3K and 250 respectively) and houses ( around 600 and 1 respectively)
• They said you will need to speak to a company (a mortgage specialist in arranging mortgages for people) who will help you arrange mortgage. We will also need you to speak to them to have a 'agreement in principle' for a mortgage, before you can reserve.
• They told me about the reserving fee amount.
• A little about the process and timeline from now until possession of the house i.e exchange of contracts within 28 days, payment of some deposit, mortgage offer in place, just before possession remainder of the deposit to be paid.
• They briefly told me about what was standard with the flat and what will require payment for upgrades.
• A little about what is the service charge about for houses and why is there a difference in service charge for houses and apartment blocks

Then I left. Gave it a thought for a couple of weeks. Called the mortgage arranging company to get the 'agreement in principle' done, which is basically they taking my information and making sure that I am capable of getting a required mortgage offer and informing the builder. I was clearly told by the company that this service is at no cost to me. Which is great.

The person from this company also told me that no lender is willing to provide 'help to buy' scheme mortgage for this builder on this site. They just won't do it as they have some problems with this builder.

I then went to the builder again to reserve the property. This is after 3 weeks after the first visit. I had many questions and I started asking them before I actually reserved the property. What irked me is mainly around costs. Now during the time of reservation they tell me the following.

Quoting everything they told me on my second visit (when I am about to reserve after having made up my mind)

• oh you can't go for new buy scheme, we don't have them on houses at all only straight purchance. (I was like WHAT?!)
• There is a service charge, but they couldn't give me a clear breakdown for the amount for a house. They said it's for maintenance of landscaping, for ground sourced heat pump which provides heat to all the properties on site, maintenance of ponds and building insurance (against fire or structural damage) etc
• on top of the service charge there is something called as an 'estate charge' (approximately 500) which every property needs to pay and it's the same for apartments and houses. They didn't tell me about this in the first visit. They couldn't clearly explain what it is about nor could they give me a breakdown.
• they tell me it's a leasehold property not a freehold.
• Due to the communal ground source heat pump every property gets heat from this, so you won't be paying for gas and will be saving money as you are paying as part of the service charge for the ground source heat pump.
• then, you will be paying for heat and there will be a 'heat meter' within your property but we can't tell you the rates. this something you will pay the company directly.
• you WILL have to use our recommended mortgage specialist company and recommended solicitors, only then will you get the price down to 250K
• they bring out a form, which I needed to sign, where it says that there will be charge (300) you have to pay for the services of mortgage specialist (which the mortgage arranging company said was at no cost to me, when I spoke to them)
• I said if you could consider 245K which they declined.
• They were pushing me on deciding on the solicitors ( they gave me 3 options). I didn't and said I will let them know.
• They told me about upgrades and how, if I like any of them, I will have to pay in stages. They also told me that if I do them myself (like wooden flooring or fancy lights) it will be cheaper, but I can only start work AFTER I get the possession of the house.

My questions

• Why is there a service charge for a house? It's got no elevators, no security system, no communal heating, no communal lights, no 'communal garden' around it, it's a standalone property. The only thing I found it valid was the ground source heat pump maintenance. Is this service charge valid?
• What the hell is an 'estate fee'? I searched the internet and I couldn't find anything.
• Does anyone have any previous experience about communal ground source heat pump and the respective charges for the same? As in, am I paying for the heat twice? (part of the service charge and then again in heat charges as per the meter?)
• How do I do due diligence on such a new build property to make sure I am not being ripped off in terms of the value of the property and all these interesting charges?
• What would your advice be? Should I forget about this property/builder and look for something else?
• Or on the contrary, are such practices and charges are common? And I should stick with it. I am kind of feeling that I am being mis-sold.
• Any comment on this fee for arranging a mortgage the builder made me sign whereas the company itself said it's at no cost to me?

I like the property, but all these sudden charges (although small compared to the property value and recurring) have left a bad taste in my mouth. This could also be due the fact that I am new to this whole process in England, hence this post. So any and all advice would be really helpful.

Thanks a lot for reading and apologies for the long rant.

Lord_Baltimore

"Advice needed on buying a new build home"

Don't. The evidence is that the stress will almost certainly kill you _pale_.

ging84

small service charges can sometimes be charged even on freehold properties for things like maintenance of roads if they are not adopted by the council, parking areas, green spaces that sort of thing
they are to be avoid if possible because most of the cost goes on admin rather than actual services

ask them to confirm in writing that they are only able to discount the price to what they said if you use their mortgage services

jonewer

Is there a tl;dr version?

atig

jonewer wrote: »

Is there a tl;dr version?

Can you please explain what is tl;dr version?

atig

ging84 wrote: »

ask them to confirm in writing that they are only able to discount the price to what they said if you use their mortgage services

Yes they have already done that. They have mentioned on the 'reservation form' that they gave me, 'any discounted price is only based on the use of recommended solcitors & brokers'
and the Total price mentioned is the discounted one.

What would that do? as in why did you say ask them to give it in writing?

atig

Also can someone tell me how do I go about doing the due diligence?

ItsyBitsySpider

atig wrote: »

Can you please explain what is tl;dr version?

This

ging84

jonewer wrote: »

Is there a tl;dr version?

should i buy a lease hold house why does it have a service charge?
what should i do about a house builder insisting i use their broker / solicitors to get the agreed price?
also something about not be allowed to use help to buy / new buy because the house builder is too dodgy
and something about a heat pump