Off Plan New Build / Mortgage / BREXIT concerns.

graceygirl

Hi All,

First post here but have found this forum amazingly helpful before now reading everyones contributions.

I am looking to buy a flat in London, and have found a one bed new build off plan which is £375,000 . We pay 10% deposit now if we are keen then next year we are set to get a mortage for the balance (minus anything additional we can save more deposit wise etc which will be around £15,000 potentially ).

The flat is amazing and the area is going through huge regeneration, lots of high end developments etc and new places opening up constantly but I am in the back of my mind concerned with Brexit if the market drops or there are issues... and then we cannot raise a mortgage of the value that we are agreeing at this year.

Would love to hear your thoughts!!

booksurr

not another thread inviting crystal ball gazers to speculate about Brexit

buy it because you want to live there not because Brexit means you will / will not make money

Cakeguts

Do you know this saying? "If have to ask how much it is you can't afford it." You here have a new saying. "If you can't finance it with a smaller mortgage caused by Brexit you can't afford it."

No one knows what will happen after Brexit but if you are worried the sensible thing to do would be to buy a flat that is already built that you can move into without financial variables that might or might not happen in the future and which you can afford now.

kingstreet

This is also posted on M&E where I've raised the issue of the lack of 90% mortgages on newbuild flats.

Crashy_Time

graceygirl wrote: »

Hi All,

First post here but have found this forum amazingly helpful before now reading everyones contributions.

I am looking to buy a flat in London, and have found a one bed new build off plan which is £375,000 . We pay 10% deposit now if we are keen then next year we are set to get a mortage for the balance (minus anything additional we can save more deposit wise etc which will be around £15,000 potentially ).

The flat is amazing and the area is going through huge regeneration, lots of high end developments etc and new places opening up constantly but I am in the back of my mind concerned with Brexit if the market drops or there are issues... and then we cannot raise a mortgage of the value that we are agreeing at this year.

Would love to hear your thoughts!!

Could you show us a link, not necessarily your flat, but similar?

eddddy

graceygirl wrote: »

The flat is amazing and the area is going through huge regeneration, lots of high end developments etc and new places opening up constantly but I am in the back of my mind concerned with Brexit if the market drops or there are issues... and then we cannot raise a mortgage of the value that we are agreeing at this year.

It's down to your appetite for risk.

The main risks include:

- Your lender values the flat at less than £375k - so you can't get the size of mortgage you need. (Either because of a drop in prices, or simply because it's overpriced)

- You lose your job - so you can't get a mortgage

- The developer goes bust - so you lose your 10% deposit

The main potential benefit might be

- Property prices increase - and you get a bargain

Does the contract limit your losses, if you back out (e.g. If you cant get a mortgage)? I suspect it wouldn't.

graceygirl

Thanks for all the response. Following doing a lot of reading on this thread and discussing the risk issue Eddddy highlighted.

We have decided not go go with this and are looking for an already built flat! xx

Crashy_Time

graceygirl wrote: »

Thanks for all the response. Following doing a lot of reading on this thread and discussing the risk issue Eddddy highlighted.

We have decided not go go with this and are looking for an already built flat! xx

You will still need to be careful about pricing and how much you borrow though.

graceygirl

What particular situation are you suggesting we be wary of? Brexit?

pawlala

Have you considered the 'Trump Factor'?

Chanes

There is a chance you will lose money on property post Brexit, especially in London with the eclectic mix that makes it.

But I am sure things will recover; economists hate uncertainty, the share indexes hate uncertainty, governments hate uncertainty. No one likes uncertainty. But if will settle, it will find a resolution and it will be certain but it's going to be a bumpy ride for a time.

Alternatively, toss a coin, it would probably be as accurate as the smartest economists we have...missed the great economic collapse...Brexit...oh, the list is almost endless.