Selling my new build flat after 2 years

Thatsthespirit

I bought a flat 2 years ago when I was 21 for £90,000 under the help to buy scheme so I only had to wedge a 5% deposit in (roughly about £4500). Worked out where I was working at the time I'd be able to cope okay with bills etc.

2 years on I'm really considering my options, especially with work and where I live. I hate the area and the job but that's a different story. I want to travel and live a little. I'm only 23! The only ties I have is this flat, and because I used 'help to buy' I can't rent legally. I literally feel imprisoned at the moment, I just want to get out a bit more while I'm still young. A few people have said I've done well to get on the property ladder, but truth is I'm stuck in a routine where I'm only in a job that's just about covering my bills now. I hardly have any money to go on holiday etc with.

I checked Zoopla and it seems to think the flat is worth £100,000 but not really getting sucked into that too much at the mo!

Based on what I've said, and please forgive me, I'm still so new to this, but after all the fees, returning to mortgage, Help to buy pocketing 20% of value back etc what will I get back cash in hand? I did check my mortgage statement and the early repayment charge is 2%. If there's anything I've missed just mention.

lonestar1

Does the freeholder get a % of any sale ? some do and most will charge for work needed when you sell.

PS Is the mortgage less than you'ld expect to pay in rent ? is so if you sell you'll have even less spare cash

eddddy

It would be much better to ask a few EAs what the flat is worth, rather than using Zoopla.

(Just say to them you are thinking about selling, and you'd like to know what price you might get - they'll come and look and tell you.)

And ask the EAs what fee they would charge (it depends where you are, but it's very unlikely to be under £1,000).

And perhaps allow £500 for your solicitor's bill.

[Deleted User]

After 2 years, I'm guessing you've paid off about 4k of your mortgage.
http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator

Your exit fee would be about £1300 (if it's 2% of the outstanding balance)
Conveyancer - whatever you paid to move in, minus the searches.
Fees for the freeholder to produce a sellers pack, with service charge details etc.
Estate agent fees - 1-2% of your sale price.

You could work out how much all that would be, my best guess is it'll be at least 4k, wiping out your mortgage capital repayment.
Therefore the cash in hand you'd get would be the increase in the price of the flat only.
If you can manage to hang in a bit longer, you'll have paid off more of your mortgage, and be in a better position. And if you can manage to stay until the early repayment time finishes, you'd save a few more quid.

xylophone

Why not keep the flat and look for a better paying job?

Then you'd have a home, be able to travel and probably be in a better position by the time you are in your mid twenties.

LJS2014

Thatsthespirit wrote: »

I bought a flat 2 years ago when I was 21 for £90,000 under the help to buy scheme so I only had to wedge a 5% deposit in (roughly about £4500). Worked out where I was working at the time I'd be able to cope okay with bills etc.

2 years on I'm really considering my options, especially with work and where I live. I hate the area and the job but that's a different story. I want to travel and live a little. I'm only 23! The only ties I have is this flat, and because I used 'help to buy' I can't rent legally. I literally feel imprisoned at the moment, I just want to get out a bit more while I'm still young. A few people have said I've done well to get on the property ladder, but truth is I'm stuck in a routine where I'm only in a job that's just about covering my bills now. I hardly have any money to go on holiday etc with.

I checked Zoopla and it seems to think the flat is worth £100,000 but not really getting sucked into that too much at the mo!

Based on what I've said, and please forgive me, I'm still so new to this, but after all the fees, returning to mortgage, Help to buy pocketing 20% of value back etc what will I get back cash in hand? I did check my mortgage statement and the early repayment charge is 2%. If there's anything I've missed just mention.

I did this, bought a new build flat under HTB and sold it 2 years later, and my advice to you would be not to underestimate the extra costs involved of selling it.

Firstly, there's the cost of the independent valuation which you have to get for the HTB people, mine cost £250+vat. The HTB people will only consider the valuation as valid for 3 months so you have to complete within this time or pay for another valuation.

You have your agent's fees for selling - I went with an online agent to make things cheaper - that cost £295 in total.

Then you have your solicitor's fees which vary- mine was around£600.

You'll be asked to pay for a seller's pack from your management company, mine cost £300. (This fee varies.)

I was also told I had to pay the remainder of the 2015 service charges before the sale could go through (these were recouped from the buyer on completion but were an initial up-front cost.)

Then the day before completion the buyer's solicitor insisted on retaining £500 until the management company produced the 2015 accounts. (I live in hope of getting that money sometime in July 2016!)

My mortgage exit fee was £1200 ish.

Other points to note, Zoopla estimated my flat's value at around the 95k mark. Don't pay too much attention to this valuation, independent valuation came in at 20k less!

Basically any small amount of equity was eaten up by the costs of selling the flat but the way I looked at it was that my mortgage was cheap so I was able to save a lot in the 2 years I had it and it was much cheaper than renting.

Feel free to let me know if you have other questions about the process as I went through all this literally 2 months ago.

Thatsthespirit

lonestar1 wrote: »

Does the freeholder get a % of any sale ? some do and most will charge for work needed when you sell.

PS Is the mortgage less than you'ld expect to pay in rent ? is so if you sell you'll have even less spare cash

Not sure on your first question. The mortgage is alot less than if I were to rent, but I'm sure either my Mom or Dad would have me for a while until I was sorted.

eddddy wrote: »

It would be much better to ask a few EAs what the flat is worth, rather than using Zoopla.

(Just say to them you are thinking about selling, and you'd like to know what price you might get - they'll come and look and tell you.)

And ask the EAs what fee they would charge (it depends where you are, but it's very unlikely to be under £1,000).

And perhaps allow £500 for your solicitor's bill.

Dang! Zoopla sounds way out. I will do this - assuming it's a free valuation?

Cherry_Gale wrote: »

After 2 years, I'm guessing you've paid off about 4k of your mortgage.


Your exit fee would be about £1300 (if it's 2% of the outstanding balance)
Conveyancer - whatever you paid to move in, minus the searches.
Fees for the freeholder to produce a sellers pack, with service charge details etc.
Estate agent fees - 1-2% of your sale price.

You could work out how much all that would be, my best guess is it'll be at least 4k, wiping out your mortgage capital repayment.
Therefore the cash in hand you'd get would be the increase in the price of the flat only.
If you can manage to hang in a bit longer, you'll have paid off more of your mortgage, and be in a better position. And if you can manage to stay until the early repayment time finishes, you'd save a few more quid.

Thanks for this! I will not make any hasty decision before Christmas or even after, but if I can get a rough idea of costs of fees etc, I won't be so shocked if/when it comes to it!

MobileSaver

Thatsthespirit wrote: »

I bought a flat 2 years ago when I was 21 for £90,000 under the help to buy scheme ... think the flat is worth £100,000 but not really getting sucked into that too much at the mo!

Unless you are in a very desirable area I would be surprised if a two year old new build was worth more today than you paid for it! You will have paid the premium for everything being brand spanking new and the next owner won't be prepared to do that (as nothing is brand new any more.)

Zoopla valuations can be notoriously inaccurate; a good rule of thumb would be to see what similar genuine new-build flats are going for today and knock 10% of those prices. Would that affect your figures?