Bought New Build, Now Have to Sell

pinktortilla

Good Morning,

I'm just after some advice and opinions!

My OH and myself bought a new build and have now been in it for a year. The plan was to stay in this long term, as we used help to buy, and cover the help to buy in the future.

I have now been offered a job that will require a move (obviously just as we have the house as we want!). The site is still being built and houses of the same design are currently being sold for 30k more than what we bought for.

I know we will get no where near the 30k, but I would be happy with breaking even! My questions are:
Are we being optimistic thinking it will sell in the first place?
Would someone prefer buying a "second hand" house over the brand new ones that are 30k more (we now have carpets, curtains, grass etc) but with HTB?

Its adding to the worry of starting a new job!

anselld

You are being optimistic to think it will sell at break even price after a year.

You say the new ones ar being sold +£30k but presumably you mean marketed. You don't know the selling price or the incentives offered.

Car1980

If people are daft enough to pay a premium on a brand new house (or a brand new car), there are always people wise enough to pay for exact same thing 6 months later at a reduced price. Sorry :-)

pinktortilla

Yeah, I do mean marketed, but I honestly don't think any incentives are offered (we are in the south west and they don't last long once they've been released).

I thought I might be being optimistic....

daveyjp

Put it on the market and see. Houses don’t necessarily depreciate like cars just because they have been lived in for a short time.

Some buyers may be happier having a house which they can see and move into rather than having to wait and then fit out themselves, especially if prices are increasing as the development progresses.

bowlhead99

There are some practical considerations you mention in terms of buying a home that already comes with grass and curtains rather than an empty shell, or being able to change the specification of the newbuild as it's finishing being built rather than accepting what compromises the previous newbuild buyer chose for themselves (and what carpets and curtains they chose etc).

But the major one is affordability and that can differ depending what end of the market you are at. Best way to illustrate that is with two fictionalised examples:

For example 1, imagine your home cost you £120k and the new ones have gone up 25% in a year and are now being sold at £150k:

If I am a new firsttime buyer coming along I could get government support to buy a new £150k one with £120k of my own deposit and mortgage plus £30k help to buy loan which is fee free for several years. But if yours was on the table for £120k which I could afford with my own deposit and mortgage and NOT need to owe the government 20% of the value of my house, that would be a great deal more attractive. So, I would be very willing to pay more than £120k for yours.

However, example 2: imagine the home is in Greater London where the government financing is available at 40% not just 20%, and the home value can be up to £600k and still get the support. Your property cost you £500k and the developers are marketing the new ones 6% higher after a year, at £530k.

If I am a first time buyer looking at that £530k new house with my partner, I would be able to get £212k covered by the HTB loan finance and then I just need to find £318k myself plus £16.5k stamp duty, round it up to £335k. Let's say our fictional buyers have £45k cash in their bank account and are happy to take on £290k mortgage between them which is not unachievable on modest (for london professional) salaries. So, the new build at £530k is within their reach.

But for that same couple to buy your £500k place (with its £15k stamp duty) which doesn't have HTB loan finance available, they need £515k themselves. They have £45k in the bank so after stamp duty they have £30k deposit on your property and will have to mortgage £470k (94%). As you can imagine, that first time buyer couple is absolutely nowhere near putting in an offer on your property because while they could support a £290k mortgage they could not afford a £470k one, and even if they currently had the cashflow to support it at current interest rates, no lender is going to give them a cheap 94% mortgage on a half a million pound house as first time buyers in the current climate. The interest rates would be higher on a 90+% mortgage than on a 55% one and so they could be looking at literally double the monthly mortgage payments to get into your place instead of the new build. You would have to drop to much lower than £500k to make it work for them.

Of course, people using the HTB scheme are not the only buyers that exist, there are cash buyers, BTL landlords and so on but you have to assume that a large proportion of buyers on a new build estate in the HTB price range are going to be using the HTB system - which is why those properties are marketed at higher prices than neigbouring or nearby estates which are non- newbuilds.

So, in example 1 your house was really very attractive at last year's price. In example 2 your house was pretty unaffordable at last year's price and you would have to drop it to get access to the full pool of housebuyers in the region. As the figures were just made up and plucked out of thin air, I expect you are somewhere in between.

kingstreet

Look here;-

http://www.rightmove.co.uk/house-prices.html

for the recent (last four months) actual sold prices of similar property in the vicinity (upto 0.5 miles) as this is what surveyors use for their comparables.

jbainbridge

Get the house clean and uncluttered like a show home. Market it above what you paid for it ... you can always reduce it / accept offers.