New Build House: Price Negotiation Chances 2015

tom5640

Hello Everyone.

Hope you can help me. Noticed that 2 house builders are putting up some houses about 5 miles from where I live in Cheshire. The house I am interested in is not built yet and due for completion in December 2015. I went in to speak to the sales negotiator and they have advised that the houses are selling well, indeed there are only 3 houses not sold that are not build, and one house not sold that is built (that I note they've taken £10k off the price of). This is of about 30 houses on the development so far. Presumably my mortgage lender would be coming out to value the house anyway and would draw their conclusions?

Have done quite a lot of searching around this forum and other forums, and there are quite a lot of topics on this, but they all seem to originate between 2011-2013 - in other words, the market is completely different now than it was then.

Can you advise if you think that in today's market there is still room for negotiation? (as per a 25% reduction in price on other threads)

Property price is £164,000.

Bad things:

Leasehold with 999 years (£200/year all in rent)
Houses are being built adjacent I believe, so may be living in a building site for a year

Things I like:

It's on the wynde of the street, so not looking into anyone else's house

I can't find the other properties on the land registry at all! God knows how the postman will find me!

Thanks for your help,
Tom

ellie27

New houses, selling well and only 3 left, builders still building so sounds like demand is there.

I wouldnt think they would reduce the price as it sounds like people are buying them.

However you will only know if you ask! Good luck!

tom5640

Thank you - yes going to ask when I go back in on Friday, was just curious if anyone had other experiences.

ellie27

The only experience I have with new builds is that the last 2 I have bought have dropped a lot in value!

Bought £178k 2007, sold £155k 2015

Many other friends who have also bought new builds have also sold for less than they bought, and not just folk who bought 2007.

I wouldnt buy new build again, due to that!

GoldenShadow

Don't know what its like in your area but where I am, a huge proportion is sold before they even start building. Demand is very high.

kingstreet

We're now submitting mortgage applications on property which won't be built until October.

BlueIsTheColour

We've just bought new, almost all the houses (only 40 being built in quiet village) sold at full asking price with carpets thrown in. We managed to get a decent discount & paid for our own carpets as it was better for us. Prices varied from £175k to £250k depending on house type. Builder knew the demand was there as so few opportunities here, almost all plots had early bird reservations on them. We early bird reserved 4 months before plot was actually released...

Saying that, I bought new in 2005 at £162k and have just sold for £119k... Which was the market value, I've not gone crazy or anything!

As we know, property values can go down as well as up!

tom5640

BlueIsTheColour wrote: »

As we know, property values can go down as well as up!

And Your property may be repossessed if you do not keep up payments on your mortgage.

Sorry, just sounded like a phrase used at the bottom of an advert!

Reading too much clearly...thanks all so far for help.

Tom

sh856531

I'm with Ellie. The real "bad point" that you may be missing is that new builds lose their value the moment you move in.

This may be different down south but in the north east of england, I've never seen a new build recently where when the owner comes to sell 2 - 5 years later they haven't had to a swallow a loss running into 10's of thousands of pounds.

Examples I've seen recently:

2 bed flats bought for 120000, now on the market for 80K
2 bed semis bought for 140000, now not even getting 105000

We are in a similar (but less catastrophic) situation where we bought for 90K and will likely have to sell for 80K. That 10 grand is the absolute limit of what we could afford to lose. How the people in our estate who bought a couple of years before us are coping - I dread to think. It's a horrible situation.

Be very, very careful buying a new build house. Demand is often only strong *when its new* - that will be *zero* help to you if you need to sell it on in a couple of years time.

If you really, really like the whole, tiny rooms, pointless garages thing that new builds seem to have going on these days, buy one that is 2 years old and let *that guy* swallow the loss.

Of course your own local circumstances/environment might be very different to ours but just be very careful. Taking a 15K - 20K loss can be a very hard thing to have to stomach on your first home

sh856531

Many other friends who have also bought new builds have also sold for less than they bought, and not just folk who bought 2007.

I wouldnt buy new build again, due to that!

There's a reason why many banks won't accept less that a 15% deposit on a new build house and those that do are only doing so because the government is partially on the hook for the loss if it goes wrong.

The simple fact is that new builds are only worth that asking price when they are new and have the various financial incentives that builders can offer in play. As soon as those 2 things are no longer present, you arrive at the true resell value of your home.

Sadly this is usually 10 - 15% less than your typical, unsavvy first time buyer expects.

audigex

The other thing to note is that if the demand is there now for new houses, other developers will be circling the area too.

One development, then another, then another... and suddenly the 4th has 6 houses left and the demand absolutely plummets out of the local market. Why buy the 2 year old second hand one for £160k, when there's a brand new one up the road with a £25k discount because the developers can't shift it?

It doesn't take many empty properties for the demand in the area to drop, as so few people can afford to keep hold of an empty house.