Near to exchange on new build first home - Should I back out or renegotiate post brex

Ashley_Davis

I am in the process of purchasing a first home in Colindale (Brent) London. Its a new build contract reassignment wherein a buyer reserved a unit in the development and paid the deposit with the expectation to pay the remaining full amount upon completion. I am taking over the contract, paying the initial deposit back plus profit to the original buyer and then paying the remaining amount upon completion.

Original purchase price = £244,150 (May 2014)
New purchase price = £290,000 (April 2016)

Similar developments in the same area are currently being sold between £335K - £385K (This includes units in the same development but higher floors)

I feel like I'm getting a good deal here looking at other development prices. There was a lot of contract reassignments on offer with these developments with investors trying desperately to off-load the investment before completion so I imagine this would bring down the price from their actual value. Theses are very difficult to acquire with a mortgage making it harder for buyers. Im hoping this would again bring down prices.. ?

My deposit is £144,000 and I have a good rate for a 2-5 fixed interest only mortgage.

Completion is set for October and it is very near to exchange. I have paid a £2,000 reservation fee and £1500 solicitors fee.

After Brexit, I have become very nervous on the state of the property market over the next few years and Im debating on whether to just go ahead with the current deal, renegotiate and see if they're willing to bring down the price after recent events and instability or drop out completely and lose my reservation fee.

Can anyone offer any suggestions?? Anything would help

walwyn1978

If Brexit had gone the other way, would you have bought it?

If you're happy with the deal you have, keep going. If you're not, walk. No one in the world can accurately predict the house market or what Brexit will do. Will you kick yourself in 6 months if the deal doesn't happen as you really like the house and see you living there for a fair few years? If you think yes, carry on.

Ashley_Davis

walwyn1978 wrote: »

If Brexit had gone the other way, would you have bought it?

If you're happy with the deal you have, keep going. If you're not, walk. No one in the world can accurately predict the house market or what Brexit will do. Will you kick yourself in 6 months if the deal doesn't happen as you really like the house and see you living there for a fair few years? If you think yes, carry on.

Its more of the rumors and articles I'm reading of whats to come but I understand its all speculative. I'm inclined to go ahead with it right now as like you said I probably would kick myself if I lose this and it turns out to be a good deal. Wandering if I have the leverage to push down the price anymore.. especially if its near to completion

bigfreddiel

BREXIT will be a tiny blip on the finches in a few years time, look at the crash of 1987, do you even remember all the doom and gloom? Can't even see it on a chart of the ftse100 now.

Buy your house and enjoy it, if it drops by 20%, so what, so will everything else.

hazyjo

They may tighten lending criteria. The interest rates may go up. Rents may go up if that's what you'll do in the meantime - or you may find you have to rent for over 3 years (possibly much longer if other recessions are to go by if it comes to that). What's cheapest in the long run? Don't suppose anyone knows, but you can probably get a vague idea. In 10 years' time it may be worth the same or it may be worth double, and you'd have paid off 10 years of the mortgage.


Simple answer, don't buy for the short term.




Jx

WombleBat

bigfreddiel wrote: »

Buy your house and enjoy it, if it drops by 20%, so what, so will everything else.

Except the amount you owe the bank!

If prices dropped by 20% (I don't think they will) then many owners will find themselves in negative equity or at best low equity restricting the options available when remortgaging.

Crashy_Time

WombleBat wrote: »

Except the amount you owe the bank!

If prices dropped by 20% (I don't think they will) then many owners will find themselves in negative equity or at best low equity restricting the options available when remortgaging.

Aye, but at least you won`t be paying someone else's mortgage.

ReadingTim

WombleBat wrote: »

Except the amount you owe the bank!

If prices dropped by 20% (I don't think they will) then many owners will find themselves in negative equity or at best low equity restricting the options available when remortgaging.

...which will only actually be an issue if you're looking to sell, or can't afford the mortgage once the introductory offer period runs out. Which shouldn't be a problem if you've done your sums and are borrowing responsibly.

OP - the developer won't negotiate - they'll simply find someone who will pay, and there won't be a shortage of them in London. So back to renting it is, and I doubt rents are gonna fall post-Brexit....

Linton

You have agreed a price. Stick with it. If someone tried to gazunder me I would refuse to negotiate and would start looking for another buyer. Once a buyer has started playing games you can have no confidence that they wont try it on again.

WombleBat

ReadingTim wrote: »

...which will only actually be an issue if you're looking to sell, or can't afford the mortgage once the introductory offer period runs out. Which shouldn't be a problem if you've done your sums and are borrowing responsibly.

Paying more interest is not an issue for you?

The point I made was that it would restrict the availability of mortgage products.

Most people plan on paying down capitol and remortgaging with a greater equity which would not happen if prices dropped significantly.

For instance if someone took out a mortgage today at 75% ltv on an amazing 2 year fix only to find at the end of the two years they had closer to 10% equity because of falling house prices they will have access to less options than they did now.

As I said I do not think prices are going to drop anyway.

Ashley_Davis

I understand I have agreed a price but I agreed this price several months before the referendum and the market is much more volatile now.

I feel I am in my right to ask for a slight discount. Bring very close to exchange and near to completion, the seller isn't going to want to put it back on the market at this stage so they can either agree to it or meet me in the middle otherwise refuse and leave it up to me to decide whether to go ahead.