Buying a new build

HanPop

Hi, I’d just like some advice because we have never bought a new build from the builder directly (we bought our current new build house shared ownership via the housing association).
I am just reading up on the process online and have seen that builders like you to exchange contracts 28 days after reserving the plot and require a 5% deposit. Is this always the case? Only we haven’t got much spare ‘cash’, instead we have about £90,000 equity in our current house. Obviously I know that they probably require a deposit to know that we are serious and don’t back out but we really don’t have £14,250 (that’s if it is only 5%). Do you think this means I have to beg/borrow/steal (lol) to be able to secure the house? I just hate having to borrow money even if only for the short term until our house sale is completed.
Thanks for reading.

lisyloo

are you planning to buy another house before selling yours?
Do you have yours on the market?

SallyDucati

Is the house built yet? I know my sister had to exchange quite a while before her house was completed. I bought a new build but it was already built so my sale/purchase went through normally exchanging 3 months after reservation fee paid.

HanPop

Ours isn’t on the market yet. The plot we want will be released in April so we are going to put our house on the market around February with the hope we’ll get a buyer in time for when the house we want is released.

MERFE

It's definitely not always the case, we agreed to exchange on with less deposit so we could carry on saving into our lifetime isa whilst the house was still being built. Best person to ask would be the sales advisor and they would know if this is something they might to on the development you are looking at.

whatdoyouthink...

When I bought my new build, the builder also wanted us to exchange within 28 days....4 months later we exchanged and completed on the same day.

HanPop

Oh brilliant, it’s good to know that it’s not always the case. I’ll email the sales advisor and ask them what they think. I just want to be prepared in case I do need the money up front. Thanks

hazyjo

When will it be built/completed?


Your mortgage will prob only be valid for 6 months. We had a post on here recently where their offer expired and their lender would only lend less than before. Not sure of the outcome, but they certainly looked to be left without a paddle...

middleclassbutpoor

Having looked around nearly every new build house we have in a 20 mile radius, I found that not one builder would allow you to reserve until your house was sold.

You will need to be in a position to exchange and unless you have cash to complete without needing to sell, your solicitor would be mad to put you in that position.

Get your house on the market and sold.

Even better, think really hard about buying a new build and do your research against pre-owned homes as you may find that given the changes to Help to buy, credit will not be as free and easy for buyers in a couple of years time and if you buy a new build in a time where prices are inflated because of help to buy, you may get caught out with this. Clearly, your new build may be in a highly desirable area but Im very nervous how people will pay for all these houses going forwards without the benefit of a 20% interest free loan.

HanPop

House will be released around April with planned completion in July, I know it will probably run over (our current one did by a month) but Nationwide (who we are with now) give an offer for 6 months so I’m hoping that is enough.
The builders I’m going with (bellway) will let me reserve as long as I’m SSTC so that is what we are hoping to do. Don’t want to put it on too soon in case we do get a buyer quickly who then won’t wait for our house to be built.
We will be using the help to buy equity loan so this compared to what we can buy on a pre owned home is much better for our current needs (I’ve just had our third baby so need more room). I do understand your concerns re selling in the future but we would be looking to stay in this house for quite a few years to come.

kingstreet

Your buyer's deposit will pass up becoming your deposit. You should not have to add cash, but your solicitor will confirm at the time.