Help to Buy Buying Query

mattconway

Hello


I wondered if someone could kindly help me. I am finding it very difficult some information regarding the help to buy scheme.


Me and my partner are looking to purchase a house next year. We will have our deposit and fees together for Decemeber. Where we live we are finding houses are being put up to reserve really early. A housing development we like the look of and in our price range has just put houses up for July 2018. This is what we had in mind for when we wanted to move.


I just wanted to know, with help to buy I have read that you need to complete within 6 months of exchanging. I can see when you reserve a new built you normally complete within 28 days. I just wanted to know does that restrict me from reserving a property longer than 6 months in advance of completion. I am guessing house builders do no really care about allowing people to reserve longer than 28 days before exchanging.


The house builder we are looking to buy from is Taylor Wimpey. Has anyone bought a help to buy property over the 6 months time frame and how did it work for them or is it the case that I can only reserve a property within 6 months to completion?


Any advice will be greatly appreciated.

ashmate19

We are in a similar position, and having spoke to a few different new home developers, the general consensus is that you will need to pay your 5% deposit (assuming your're using HTB and only saving a 5% deposit) 4-6 weeks after reserving the property. We missed out on a property because we weren't in a position to pay the deposit that soon, however, when it is due to be completed we would have enough. Slightly frustrating!

One company (Bellway homes) did say they would be willing to accept a lesser deposit at exchange (4-6 weeks after reserving) and the rest upon completion, however we didn't proceed with this as the house would've been really stretching us financially so decided against it. It is worth asking companies if they would offer a similar deal to what Bellway offered me. I did ask Redrow about it, and I was informed he would ask his manager about it but said it isn't standard practice. However, the house we wanted with Redrow was already being reserved by someone else so I didn't take the query any further as we had already missed out on the last property of the type we wanted.

Hope this helps a bit.

SuboJvR

The Help to Buy Authority to Proceed is valid for six months.

I'm sure different developers practice varies but it may be that you can reserve a property, and then they will only apply for the Authority to Proceed when in the right timeframe. This was the case for us - we actually didn't even pay the reservation fee until the Authority to Proceed had been received.

Once we paid the reservation fee, the contract stuff started, and I believe that "should" be completed within 28-42 days.

Hence you exchange 4-6 weeks after receiving Authority to Proceed.

You complete when the property is ready, but this will still be within the six month timeframe. Or it should.

So for us:

View development May 25th or so.
"Reserved" a plot, completion window October/November.
Late June the Authority to Proceed was applied for
June 26th or so we paid the reservation fee (for developer, property goes from "On Hold" to "Reserved")
Took a while for contracts to get sent to our solicitor
Once they arrived, the 28-42 day timeframe started.
We only got our paperwork around the 21st of July or so.
Deposit sent to solicitor to prepare for exchange - today.
Solicitor is now applying for Authority to Exchange.


However we viewed some developments that were seemingly so popular they wouldn't necessarily wait for the Help to Buy window i.e.; people were snapping them up off plan more than six months in advance. But other developments we viewed were clearly more actively engaging with the Help to Buy market.

mattconway

Thank you that is really helpful. It is probably worth a conversation with the different developers. Which developer have you reserved your property with?

SuboJvR

Taylor Wimpey, so hopefully you will find them to be similarly helpful.

We felt some developers were much less keen on encouraging Help to Buy buyers, but for some reason when we went into this TW site office they were extremely welcoming from the start. I suppose they have different target demographics to appeal to. Another local builder was also very helpful and willing to engage us for a Help to Buy purchase. Incidentally, we found Redrow to be the most dismissive.

We also had a further sticking point in that I knew our deposit would only be available on a specific date (from when we provisionally reserved a plot, it was 10 weeks away!) but I needn't have worried about this either.

SuboJvR

I should add that the local builder seemed to release properties for reservation once they entered the Help to Buy window. So they had a lot of plots of the house type we liked, and would email when they came 'into their window' so to speak ie they knew completion would be within six months, so they are open for reservation.

So it may be if you are only looking to part with any money in December that this will suit a plot that is due for release but not released yet. Hope that makes sense.

mattconway

I really appreciate that. When I went in a few weeks ago they said the next lot would be released in September for July 2018. We just assumed we wouldn't be able to reserve so didn't ask the question. We have our heart set on a particular house and on this development so we don't want to miss out. So fingers crossed it will all work out. We will have all our money saved for the deposit and legal fees saved by the end of November so hopefully we can reserve when the plot comes up and exchange within the 6 months of completion which will fit in with our plans perfectly.

SuboJvR

mattconway wrote: »

I really appreciate that. When I went in a few weeks ago they said the next lot would be released in September for July 2018. We just assumed we wouldn't be able to reserve so didn't ask the question. We have our heart set on a particular house and on this development so we don't want to miss out. So fingers crossed it will all work out. We will have all our money saved for the deposit and legal fees saved by the end of November so hopefully we can reserve when the plot comes up and exchange within the 6 months of completion which will fit in with our plans perfectly.

If it's not too far away there's no harm in popping in before the plots come out to ask these questions. It will depend from site to site I'm sure, but they may well be happy to reserve one for you provisionally and then take the money off you for proper reservation once you enter the Help to Buy window

Do note that if you buy with Help to Buy:

- There won't be any discounts on the asking price
- They may offer incentives but they are limited by what they can offer (the easiest thing that they can do is offer fixtures/fittings for the house e.g. flooring), stuff like contributing toward Stamp Duty needs to be on your potential mortgage lender's approved list
- I would advise using a mortgage broker. They will be able to check that whatever incentives are accepted by the potential lender before you go for full mortgage application.

Good luck!

Crashy_Time

SuboJvR wrote: »

Taylor Wimpey, so hopefully you will find them to be similarly helpful.

We felt some developers were much less keen on encouraging Help to Buy buyers, but for some reason when we went into this TW site office they were extremely welcoming from the start. I suppose they have different target demographics to appeal to. Another local builder was also very helpful and willing to engage us for a Help to Buy purchase. Incidentally, we found Redrow to be the most dismissive.

We also had a further sticking point in that I knew our deposit would only be available on a specific date (from when we provisionally reserved a plot, it was 10 weeks away!) but I needn't have worried about this either.

http://www.telegraph.co.uk/business/2017/08/01/taylor-wimpeys-profits-hit-setting-aside-cash-deal-leasehold/

mattconway

Thanks again! We expected we would have to pay full price. We was hoping they would potentially provide the flooring and contribute to some appliances, but that is probably pushing it. The flooring is the main thing we are aiming for as we can save up for the stamp duty before completion easily. It is just those expensive extras we need to sort out. Did you manage to get many incentives with your property?
We have a broker already who seems to very knowledgeable so we will probably use them rather than TW. I have already spoke to theirs they recommend but they seem to only want to push for the main providers when there is so many other lenders out there.

dhokes

SuboJvR wrote: »

Do note that if you buy with Help to Buy:

- There won't be any discounts on the asking price

Any reason why not? Is that a legal T&C for using the help to buy equity loan?