Finding Large Deposit For New Build When Money Tied Up

ojejones2000 · 2 July 2016 at 9:58AM

My wife and I are looking to purchase a new property. This propery is a new build and is not ready until April 2017, HOWEVER the house builder needs a 10% deposit right away to reserve the plot. This is one of 27 other houses on the development and they are asking the same of all buyers. My house is on the market and will sell in the next few months but I need the deposit right away. I have £200k tied up in my own house as equity and need £60k as the deposit.

Can anyone recommend the best way to work around this so we dont lose the new build to another buyer?

eddddy · 2 July 2016 at 11:15AM

Out of interest, who will hold the 10% deposit?

Is this an 'off-plan investment scheme', where you pay the developer chunks of money up front to fund the building costs?

If so, you need to be aware of the risks. e.g. If the developer goes bust, you could lose everything you've paid them.

Hutch100uk · 2 July 2016 at 7:01PM

10%??? Its usually £500-£1000!!

AnotherJoe · 2 July 2016 at 7:46PM

Sounds very dodgy to me, looks like the developer will be funding the first tranche from these deposits since as said a "normal " deposit would be in the £500 range. £60k means they need the money so it won't be held by a solicitor since they couldn't use it, so almost certainly your money would be seriously at risk.

Hutch100uk · 2 July 2016 at 7:47PM

What level of insurance is there that you get your money back if they go bust or can't fund the development? Personally I would avoid like the plague.